Coal news and updates

LEIGH SALES, PRESENTER: Our hospitals, transport, everything we depend on government to provide, is financed in a big way by our minerals exports.

 

And the bad news is that iron ore prices have plummeted in recent times and so has coal - spectacularly.

 

Almost a third of coal exporters are losing money, forcing them to shed workers and contemplate the closure of some mines.

 

So is there a recovery in sight?

 

David Lewis reports. 

 

DAVID LEWIS, REPORTER: The opening of a $4 billion coal mine south of Moranbah in Queensland's resource-rich Bowen Basin had the Prime Minister enthusing about the future of coal. 

 

TONY ABBOTT, PRIME MINISTER: This is a sign of hope and confidence in the future of the coal industry. ... Coal is good for humanity. Coal is good for prosperity. Coal is an essential part of our economic future, here in Australia and right around the world.

 

DAVID LEWIS: Caval Ridge will create 500 new jobs, but there's little celebration in Moranbah. The new mine will be totally staffed by fly-in, fly-out workers.

 

MEETING ATTENDEE: I've been told over the phone from my superintendent that my job's not there anymore.

 

DAVID LEWIS: Mining jobs in Moranbah are disappearing fast. These workers are meeting to discuss whether they'll accept voluntary redundancies after BHP Billiton announced it would axe 700 jobs across six coal mines.

 

MEETING ATTENDEE II: My job means more to me than a pocketful of gold and my kids' jobs mean more to me and their kids' jobs mean more to me and the town means more to me than a five-minute bit of - a five-minute (bleep) hit from the company.

 

DAVID LEWIS: Moranbah is a town that was literally built on coal in 1971. Mining has been its lifeblood, and before prices for the commodity peaked, producers were racing to get as much of it to market as possible.

 

CHRIS URZAA, HDR SALVA: It made so much sense to produce every single extra tonne of coal that you could during the boom years because you were making so much money that it didn't matter how much it cost to put on a boat.

 

DAVID LEWIS: But the good times were never going to last. Since 2012, prices for both metallurgical, or coking, coal used for steel production, and thermal coal, used for electricity, have plummeted. Moranbah's economy has also crashed. Real estate agent Bella Exposito says tenants were paying up to $1,800 per week for basic rental homes just a few years ago. Today, it's a very different story.

 

BELLA EXPOSITO, REAL ESTATE AGENT: Prices has changed dramatically. This property alone was $2,000 a week; it is now $300 a week rent.

 

DAVID LEWIS: That's an extraordinary drop, isn't it?

 

BELLA EXPOSITO: It is. And investors doesn't really like it. As you know, they probably purchased $800,000. It is now worth $220,000.

 

DAVID LEWIS: Today, the once-bustling town square is deserted.

 

TREHAN STENTON, MORANBAH TRADERS' ASSOC.: The region has been solely focused on coal and I think that's been at our detriment. I think a plan needs to be put in place to help us ride out these peaks and troughs.

 

DAVID LEWIS: Steve Hanvey's bakery business is struggling. Fly-in, fly-out workers don't come to town to spend their money and mining companies are even bringing food in from elsewhere. He used to supply bread to several workers camps, but now he only delivers to one. 

 

Where are you taking the bread to this morning?

 

STEVE HANVEY, BAKER: This load that we've got on board now goes out to the Dyno Nobel Camp, which is out in the Goonyella Road. It's about a 15-minute drive.

 

DAVID LEWIS: And how many people are at that camp?

 

STEVE HANVEY: I believe there's 400 people at the moment. There've been as high as 900. But with the downturn of everything, they've come right down.

 

DAVID LEWIS: It's an anxious time for the local mayor, who has worked hard to lure families to the town.

 

ANNE BAKER, ISAAC REGIONAL COUNCIL MAYOR: You know, we need to have permanency and people living in the community.

 

DAVID LEWIS: And that means permanent jobs?

 

ANNE BAKER: Permanent jobs and permanent people in the community.

 

DAVID LEWIS: She's pleading with the big miners to hold on to their local workforce.

 

ANNE BAKER: I'm asking for a balanced decision to be made and to not - because the price of coal is down and everybody understands that, not to have such a slash-and-burn approach.

 

DAVID LEWIS: But a leading consultancy firm say mining companies have little choice but to cut costs given the tough economic climate.

 

CHRIS URZAA: I think the mining companies are all doing the right thing. They're trying to pull all the levers that they can to try and get the price down for production of coal.

 

DAVID LEWIS: Roughly a third of Australian exporters are losing money due to depressed prices for coal. The question is: can they survive?

 

MICHAEL ROCHE, QUEENSLAND RESOURCES COUNCIL: For some, they're only operating because to shut down would actually involve a bigger loss and what I mean by that is that even if they shut down, they would still be incurring a lot of their fixed costs such as their rail and port charges. So, mines are doing their sums at the moment and deciding whether it's a smaller loss to stay open or shut down.

 

DAVID LEWIS: Another blow is China's decision to enforce a new three to six per cent tariff on coal imports and to restrict imports of dirty coal in a bid to reduce pollution. Some mining analysts are now questioning whether Australia's biggest coal project in Queensland's Galilee Basin is viable. But the mine lobby rejects those concerns.

 

MICHAEL ROCHE: It's not that demand is falling, demand is growing for coal, both thermal coal and metallurgical coal. India's going to treble its imports of coal and Australia's going to be a big source of that coal and no-one has actually found a way of making steel without coking coal and we're the world's biggest exporter of coking coal.

 

DAVID LEWIS: The problem is nobody knows exactly when prices will recover and the uncertainty is weighing heavily on the minds of families in Moranbah.

 

LOCAL WOMAN: People are probably going to have to move if they're going to lose their jobs, I mean, 'cause that's what brings you here. So at the moment, it hasn't affected us for the time being. But we're just going to have to see how everything turns out.

 

DAVID LEWIS: Just crossing your fingers?

 

LOCAL WOMAN: Yeah, definitely.

 

 

Source: http://www.abc.net.au/