Prospects for coal uncertain
THE region's miners have spent the past three months living with uncertainty and as the mining giants release their first quarterly reports for the year, it looks like the worrying goes right to the top.
With coal markets in flux, companies are apprehensive about the rest of 2009, even as American coal-mining juggernaut Peabody, which owns three mines in our region, announced it had secured its second-best contract result “in recent years”.
Last year is considered to be an exceptional year by mining companies, as flooding rains bogged down our region's mines at the beginning of 2008, subsequently forcing prices sky-high, before demand dropped suddenly in September as the Global Financial Crisis took hold.
A spokesperson for Peabody Pacific said the company now used 2007 figures “because it reflects an average price” for coal.
According to its report, the company was “trimming” its coal production but planning an increase for next year.
Rio Tinto, which owns three mines in Central Queensland, was boosted after its production of coking coal, used for making steel, jumped by 30 per cent compared to early 2008.
Of course, it would be more impressive if its operations weren't almost completely washed out after last year's floods.
Chief executive Tom Albanese said the production was in line with reduced market demand.
“The markets remain volatile and the timing of global economic recovery uncertain,” he said.
The world's biggest miner, BHP Billiton, gave itself a back-handed compliment on its report card, saying it had “achieved sound operational results albeit with lower production compared to the December 2008 quarter”.
The company said market conditions would remain uncertain, which is pessimistic news for miners reeling from the 1100 January job cuts.
The Queensland Resources Council, representing the state's big and small mining companies, released its inaugural State of the Sector report to the Daily Mercury yesterday, with chief executive officer Michael Roche expressing uncertainty.
“As we are constantly reminded, global economic growth will recover and its pace could match the collapse in demand that marked the last quarter of 2008,” he said.
But later in the report, it states, “The timing and speed of global economic recovery remains uncertain.”