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Coal in crisis and what it means

The QRC says most Queensland coal producers are well down the track extensive cost reviews.
The QRC says most Queensland coal producers are well down the track extensive cost reviews.

Tiny glimmer of silver in mining jobs cuts

JOB cuts in the mining sector may have a slight silver lining for resource communities as workers seek other employment opportunities.

That was the view of Central Highlands Mayor Peter Maguire, who said while any job losses were devastating for a community, the opportunity existed to view the cutbacks in a semi-positive light.

"Obviously the flow-on effects are many," Cr Maguire said of the potential social implications on resource communities.

"There's the potential they could reduce the price of rentals in some towns as the more available rentals, the more the prices could reduce.

"But with the downturn in the mines in the regions, there may be an opportunity for some communities to take a deep breath and give the council a chance to catch up."

Cr Maguire said the Central Highlands Regional Council was deeply concerned about cuts in both the government and mining sectors and admitted it was largely a waiting game to learn the full extent of cutbacks and redundancies.

"I think there's still a lot to happen in the state sector," he said.

"The concern is that all these cuts can have a negative impact on communities.

"Again, the concern is that with the job losses and people working for contractors, they have mortgages."

 

Mayor Peter Maguire
Mayor Peter Maguire

Although the council was powerless to stop any of the cutbacks, Cr Maguire said the resource sector had been slammed by mass job losses in past years during market downturns, but it had bounced back.

 

"Until the coal prices bounce back, one of the things companies can do is cut jobs," he said.

"But if the prices of rentals come down, it may attract more people to the towns and, in my mind, that could be a good thing."

Cr Maguire said the CHRC would continue with planned housing developments to ensure future demand for accommodation was met in Central Highlands towns.

Isaac Mayor Anne Baker was not able to be contacted yesterday, but in the wake of Rio Tinto announcing the closure of its Blair Athol coal mine near Clermont, said the strategic move would not kill off the region's towns.

"Our population will double in the next 10 to 20 years as a result of the strong investment in our region's resources, with Clermont also continuing to provide a central point for our vibrant agricultural sector," Cr Baker said.

She said the Isaac Regional Council would work with resource companies to ensure local families could seek alternative opportunities to remain in the region.

 

Union gives cautious nod to operational reviews

 

THE SBU strikes earlier this year near Blackwater.
THE SBU strikes earlier this year near Blackwater.

QUEENSLAND'S largest mining union has cautiously recognised the need for resource companies in the Bowen Basin to review operational costs, but has warned it will monitor future announcements about job cuts closely.

CFMEU district president Stephen Smyth said the union understood the impact international coal market downturns had on resource prices and on the ability of mining conglomerates the likes of BHP, Xstrata and Rio Tinto to remain competitive and profitable.

But low commodity prices should not be blamed for job losses if that was not the true case, he said

"The union is very concerned by any mining job losses in Central Queensland and we will ensure that any of our members that are affected by potential cutbacks have the union's full support," Mr Smyth said.

"But in saying that, the CFMEU is also very aware of the propensity for mining executives to continually threaten cutbacks or closures when they're rent seeking.

"I seriously hope that it's just coincidental that recent comments about the entire Bowen Basin being under review come at a time when the State Government is considering increasing royalties."

 

Yancoal ponders mine cuts

 

The future of Rio Tinto’s Clermont and Blair Athol mines has locals worried about the long-term future for the town.
The future of Rio Tinto’s Clermont and Blair Athol mines has locals worried about the long-term future for the town.

CHINESE-backed Yancoal Australia has gone on the record about the situation faced by the Australian coal industry.

 

It has revealed its Australian company, which operates two mines in Queensland and five in New South Wales, would examine operations, cut costs and review any plans for expansion.

In a statement to the stock exchange on Monday, the Yarabee mine operator said it expected metallurgical coal prices to remain "weak and volatile".

It hoped thermal coal prices had now bottomed.

"Yancoal is considering all options to reduce costs," the statement said.

"Expansion plans across all mines will be reviewed and ranked to ensure that the appropriate capital expenditure discipline is maintained."

Yancoal's warning comes as the Queensland Resources Council declared more job cuts to be a "certainty" as most operations struggled to remain profitable.

QRC chief executive Michael Roche delivered a bleak outlook on Monday.

"In many cases the coal industry is already globally uncompetitive," Mr Roche said.

"Many Queensland coal producers are now generating cash losses.

"The reality is most QRC coal members are well down the track of extensive cost reviews."

On metallurgical coal, Yancoal said prices had been falling since mid-2011 as demand in major consuming countries fell. Yancoal is the largest Chinese-controlled entity on the Australian exchange.


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