The Australian reported that mining giant Rio Tinto is preparing to sack people from one of its newest and most modern mines in Queensland, as the coal industry faces an unhappy coincidence of rising domestic costs and lower global prices.
A statement from Rio Tinto said the company would have to make some redundancies as part of a review of the operations of its Clermont Mine in central Queensland, which employs 770 people and was opened only two years ago.
It said "Rio Tinto is looking at ways to reduce costs at Clermont Mine, to improve its competitiveness in an environment of significantly lower thermal coal prices. A review is under way and although the details are to be worked out, it will unfortunately mean redundancies will be required. We do not take this decision lightly and are committed to keeping our employees informed, and providing support to those affected.”
Queensland Resources Council chief Mr Michael Roche said many coalminers considering new mines in both the Bowen Basin in central Queensland and the Surat Basin in southwest Queensland were currently facing a "perfect storm", where falling coal prices coincided with rising costs.
He said “There's no doubt that the proponents of these projects will be reviewing the medium and long term outlook for thermal coal prices as they come to a final view about whether or not to proceed with those projects. There is also a softening of the demand situation and some of the knock-on consequences in Queensland is that many are operating at best break even, while some are in a loss situation, on current prices. But there is still generally an upbeat view about demand for good-quality thermal coal from places like Australia underpinned by demand out of places such as India.”
World thermal coal prices have dropped in the past year from $115 a tonne to just over $83 a tonne, largely because of increased coal exports from the US. At the same time, the growth in demand from China has not been as great as anticipated, and miners are facing domestic cost pressures from new taxes, and rising fuel and equipment bills.
Source - The Australian
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