Foggy forecasts for Australia’s coal mining industry
Australia continues to struggle to recover from some of the worst flooding on record, which has had knock-on effects to the mining industry as coal export forecasts have been cut by 5.2 percent, which will be a damaging blow to Australia's economy.
The looming risk of floods and natural disasters remains a constant threat for Australia's mining industry, whereby damage caused by floods and cyclones this year has already cost Australia's economy A$12 billion in the year to March, with the mining sector being most affected according to treasury estimates. As a result, it has caused the biggest drop in the GDP index for 20 years in the first quarter. Analysts have estimated that it could be another six months before Australia, the world's largest mining producer, bounces back – that being dependent on next season's rains arriving late.
"If the rains come early again next year, all bets are off for a full recovery," David Lennox, a commodities analyst for research firm Fat Prophets, said.
With floods the size of France and Germany combined, it has been predicted by investment bank UBS, that Australian coal producers will take twice as long to recover and one analyst has described the Queensland coal fields as resembling “one big swimming pool.”
The Australian Bureau of Agriculture and Resource Economics and Sciences (ABARES), had cut forecasts of coal exportation from 161 million tonnes, to 152.6 million tonnes, respectively. High prices however will soften the blow, as the high demand for coal from China means that export earnings are still expected to exceed 18 percent to a record $270 billion in the year ending June 2012.