Queensland coal sector on edge over election result, Queensland election 2015, Queensland election result, Queensland election Result news 2015

Queensland coal sector on edge over election result

Queensland's struggling coal miners are on alert after the shock defeat of Campbell Newman's government, with some operations facing certain shutdown if hostile policies are introduced by the incoming Labor party.   

Many mines are being run at a loss, and for their head offices – often based overseas – any policy uncertainty or pressure could prove the final straw, Queensland Resources Council boss Michael Roche told Fairfax Media.

"Some miners have put to me that if there was to be unexpected negative moves by a new government, they may find that head office decides that they should opt for the certainty of the cost of a shutdown, rather than the uncertainty of staying in operation," Mr Roche said.

Mr Roche said about half of Queensland coal was being produced at a loss, including about 10 per cent at losses greater than $14 a tonne.  

"At the moment it is very hard for them [the miners] to convince head office to tip in capital, or essentially to under-write their losses. So the last thing we need are policy changes that tip the balance on the preparedness of the resource company head offices to keep tipping in the capital to sustain these operations."

It must be "rammed home" early on in industry discussions with the incoming government that many of Queensland's producers are in survival mode and can't afford additional pressures, he said. 

Many of Queensland's mining operations are still open only because of onerous take-or-pay obligations for rail and port that lock them into paying haulage charges for coal, regardless of whether or not they ship it.

"If you were to overlay a set of policy changes from left field, that might be the tipping point for some," Mr Roche said.

"That's a conversation that I've been urged to have as early as possible with the new set of ministers."

Queensland exports about 200 million tonnes of coal a year - about half Australia's total exports. That figure includes about 145 million tonnes of metallurgical coal, while the balance is thermal. 

Prices are continuing to deteriorate. Premium metallurgical coal – a type of coking coal – is trading at about $US106 a tonne, compared to more than $US300 it was fetching three years ago. while thermal coal has been trading at close to $US60 a tonne, less than half prices in 2012. But a drop in the Australian dollar to below US80c in the past few months has provided some much needed relief for the industry, after years of trading at near parity. 

Big overseas-based miners in Queensland include Glencore, Anglo American and Peabody. 

Labor has been in government in Queensland for the best part of the past 20 years, and is considered to be supportive of the resources sector. But some nuances on policy are yet to play out. 

Annastacia Palaszczuk's Labor is widely expected to form government, after Campbell Newman's LNP was swept from power over the weekend.

"Ultimately, we've had bipartisan support for the resources sector, don't expect that to change," Mr Roche said.

Minerals Council of Australia chief executive Brendan Pearson said that although the election result was not yet clear,  "the bottom line is that both major parties in Queensland, and most of the minor parties, support the expansion of the coal industry, including in the Galilee Basin".

One of the key points of difference between the two parties was over funding for an undeveloped rail line needed to connect new mines in the Galilee with Abbot Point port. The LNP government pledged to commit at least $300 million to the rail build, but Labor has said it will not put up funding. The question of where to dump the dredging waste from the Abbot Point expansion remains unresolved. 

 src:http://www.brisbanetimes.com.au/

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