Coal companies prepare for hard year as job losses mount
QUEENSLAND coal company executives are digging in for a challenging 2013 where the focus will stay on reducing costs and rebuilding export volumes.
Recent job losses in the Queensland coal industry are a painful reminder of the industry's trade exposure, according to Queensland Resources Council chief executive Michael Roche, but some encouragement could be taken from recent global developments.
Mr Roche estimates up to 5000 positions have been shed over the past few months.
"These losses have hit contractors the hardest and extend from the coalface to head office," he said.
"They are a sad but inevitable consequence of a collapse in coal prices and rising production costs."
Mr Roche said in the past, export industries such as coal had been insulated to some extent by a corresponding fall in the value of the dollar, but Australia's high interest rates and Triple-A credit rating had cancelled this out.
In the meantime, wage and materials costs in Queensland coal mines had continued to soar, he said.
"With the current price and cost imbalance we can expect a continuing focus on reducing costs across the board, including an expectation that suppliers of goods and services will 'sharpen their pencils' on price," Mr Roche said.
"Queensland coal producers also need to cover the added costs of the higher coal royalties that came into effect last month."
On the upside, Mr Roche said in Queensland the coal-seam gas industry had added 7000 employees and contractors to its ranks in the first half of 2012.
"From all reports, the gas sector in Queensland has continued to recruit strongly in the second half of 2012, providing an important buffer to pressures elsewhere on the state's resources sector," he said.
Mr Roche said there were signs that global coal prices may have bottomed out and that a recent strengthening in export volumes through Queensland ports was also encouraging.