BHP Billiton Coal President Mike Henry painted a bleak picture for the coal mining sector in his speech at an American Chamber of Commerce lunch in Brisbane last week.
According to him, depressed prices will likely continue to plague the industry for several more years as miners continue to produce too much supply and China’s economy slows.
“Prices for metallurgical coal have fallen by a further 25-30 per cent since the start of this calendar year and thermal coal by 10-15 per cent. There are no signs of things getting better in the immediate term,” Mr Henry said.
“The coal industry is an important part of the Australian economy and it has been for more than 170 years. We employ thousands of people in regional areas, we make a significant contribution to federal and state revenues through royalties and taxes.”
After stressing that the financial sustainability of the Australian coal industry is completely dependent on the country’s ability “to materially improve and sustain levels of productivity to stay one step ahead of our global competition”, Mr Henry went on to say that the industry had a responsibility to improve the quality of debate and the depth of understanding about the sector.
“We can only hope to secure balanced support for the industry if we step up and help improve the quality of debate and the depth of understanding about what we do, why we do it – and how important it is,” Mr Henry said.
“We are confident that we and others in industry can rise to this challenge, particularly when supported by the right regulatory reform. Through this we can sustain industry attractiveness in a way that is good for the states, the nation, shareholders and of course good for the more than 152,000 Australians who work in coal or are supported through related jobs.”