Australia's Queensland coal industry hits new wall as Yancoal reviews expansion
Already running at a loss or struggling to stay in the black, most thermal coal mines in Australia's Queensland are now facing additional challenges as exports drop and major projects wind back.
According to the Queensland Resources Council, exports leaving the local ports have sunk radically with Dalrymple Bay down 8% for the financial year and Abbot Point down 10%, reports ABC Rural.
The picture only got grimmer on Monday, as Yancoal Australia, the biggest Chinese-controlled entity listed on the ASX, confirmed it is reviewing its expansion plans and studying options to cut costs. Yancoal, which operates seven coal mines in New South Wales and Queensland, added that the next few months would be difficult for the company as lower coal prices and the strong Australian dollar impact business.
Last week, several reports pointed to BHP Billiton (ASX, LON, NYSE: BHP) as considering further coal-based reductions in Brisbane and even Rio Tinto has announced the early closure of the Blair Athol mine.
Aslo Xstrata Coal (LON:XTA) confirmed it has cut a number of jobs from its coal mining operations in Australia due to sinking prices for both coking and certain kinds of thermal coal.
Thermal coal prices recently hit a two-year low at the Australian port of Newcastle.
Analysts are adding to the pessimistic outlook saying that China, the world's largest coal importer by volume, appears unable to keep the coal balance right and that it might not be a long-term structural importer of thermal coal.