Lagging productivity imperils Australian coal miners' prospects

The lagging productivity of the Australian coal industry could render as much as a third of the sector's output unprofitable.

AFR reports that a recent paper by Booz & Co says productivity in the Australian resources sector has lagged behind other industries by 8% per annum over the past decade.

The claim would substantiate Resource Minister Martin Ferguson's recent assertion that the halcyon era of high commodities prices has left Australian miners "fat and lazy," undermining their efficiency and competitiveness.

According to the Booz report the low productivity of Australian coal miners leaves them highly vulnerable to any further weakness in commodity prices – a problem which has already severely impacted the country's resources sector this year.

The report says that a 20% fall in coal prices levels from present levels would render 30% of Australian coal production unprofitable, causing job losses and economic duress.

Coal and iron ore serve as the Australian resource sector's two stalwart exports, as they are key ingredients in China's belated modernization process and are required in large amounts for power and steel production.