Anyone reading the weekend papers cannot have missed the great coal whinge that was led by The Australian:
THE world’s biggest miners have united in sounding the alarm that Australia’s $60 billion coal sector is under extreme pressure, with global giant Rio Tinto warning the industry is “staring down the barrel”.
Harry Kenyon-Slaney, chief executive of Rio Tinto’s energy product group, says the sector is facing a wide range of challenges: lower prices, the strong Australian dollar, high taxes, increasing regulations, delays in government approvals and community opposition to mining.
…Mr Kenyon-Slaney said that while Rio had already reduced its unit cost of coal production in Australia by about 25 per cent in the past 12 months, the company was not done with its cost-cutting efforts.
…The chief executive of Anglo American’s coal business, Seamus French, said the industry was in the toughest cycle he had seen in the past 10 years, with about 60 per cent of Australian production losing money.
…“The market is over-supplied and Australia is at the top end of the cost curve,” he said.
Well, yes, it is over-supplied. But no, Australia is not at the top end of the cost curve for thermal. We’re mostly in the middle:
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.