THE slump in world prices for Queensland's metal-making or metallurgical coal - once the supercharger for the state's economy - is now acting as a handbrake on Australia's export earnings.
Exports of gas and thermal coal - used to produce electricity - are expected to be stronger in the new year even as prices remain low for metallurgical coal.
This is good news for the liquefied natural gas projects sprouting on Curtis Island off Gladstone and the more than 36 thermal mines in Queensland.
But the news will be lamented by the metallurgical coal heartland of Central Queensland's Bowen Basin, already hard-hit by job losses and mine closures.
The latest quarterly report from the Bureau of Resource Energy Economics points to China upping its growing profile in the coming year as India remains more restrained.
That growth means more demand for Australia's thermal coal, oil and LNG as China feeds its insatiable appetite for electricity.
But the lower value of metallurgical coal has had such an impact on the industry that, in total, average export earnings will fall slightly.
Income from metallurgical coal is expected to fall by 24% in this financial year.
This will create a difficult situation for the mining giants because the amount of coal being export is forecast to increase.
So more coal will be dug from the ground compared to previous years, but the profits will be lower than before.
The outlook, according to BREE, is for prices for metallurgical coal to improve towards the end of 2013.
HSBC chief economist Paul Bloxham said Australia was seeing a shift in demand away from the coal used for building and towards the coal used for creating power.
We are no longer relying on China to keep building its giant cities, we are relying on China to keep its lights on.
"We are moving towards being a larger global energy producer," Mr Bloxham said."Japan is looking to shift away from nuclear energy.
"They're demanding more alternatives including thermal coal and LNG."Japan remains Australia's top trading partner for coal.Mr Bloxham said the low prices for metallurgical coal were thanks to a worldwide slump, driven in part by the financial crises faced in Europe."But we're expecting the Chinese economy to be bottoming right now - we see it lifting in 2013."