One third of Queensland coal mines running at a loss, says new report

MINING in Queensland is in a worse state than it’s been in for decades, with a third of coal mines not making money, a damning new report has revealed.

A QUEENSLAND coal mining company will reopen a mothballed mine less than a year after purchasing it for $1. Stanmore Coal says the Isaac Plains mine is on track for first shipment of coking coal in April 2016. The mine’s reopening is set to create 150 jobs and restart the flow of more than $7 million a year in royalties to the Queensland government.

MINING in Queensland is in a worse state than it’s been in for decades, with a third of coal mines not making money, a damning new report on the industry has revealed.

And things are so bad that the Queensland Resources Council (QRC) is now asking the state government for emergency relief.

The report, released today by mining sector analysts Wood Mackenzie, found a third of Queensland coalmines are running at a loss and more than half of the mines producing thermal coal for power stations are in the same position.

QRC chief executive Michael Roche said 21,000 jobs have been lost in Queensland’s resources sector — and unless the state government steps up, the remaining 60,000 jobs could go too.

He is expected to discuss an emergency royalties regime at a meeting with Premier Annastacia Palaszczuk and her jobs committee.

Mr Roche said he commissioned the study after a summer of dire meetings with mining and gas company chiefs.

“They were saying this is one of the most challenging times in the last 50 years, never seen it this bad,” he told ABC radio on Monday.

“If the unprofitable mines are to shut down it would cost the state hundreds of millions of dollars.”

The only reason some coalmines were still open is because they had fixed rail and port charges to cover, Mr Roche said.

“So even in these grim times, the government and private sector service providers of port, rail, energy and water services — they are not offering any relief,” he said.

He wants the premier to look at what government-owned and private sector providers can do to ease those pressures.

Mr Roche was pressed by the media on why the government should step in and help when it refused to guarantee a loan to help Clive Palmer’s Townsville nickel refinery keep trading. The refinery went into voluntary administration last month just after it axed 237 jobs.

“We’re not looking for a bail out,” Mr Roche said. “We are looking for the government to recognise that one of the biggest job generators in this state, one of the biggest sources of government revenue, is under huge pressure.”

The state government has been contacted for comment on the report.

But anti-mining group Lock the Gate Alliance said it was a bit rich for the coal industry to be crying poor because boom times had come to an inevitable end.

“The industry is inherently cyclical and there is no case for industry relief,” spokesman Drew Hutton said in a statement.

The government must examine ways to diversify the economy and should not be subsidising poorly managed businesses, he said.

The Australian Conservation Foundation (ACF) said the report showed the coal industry was not financially viable, despite hundreds of millions of dollars in subsidies each year.

“ACF urges the federal and Queensland governments to invest in industries with ongoing job opportunities, like renewable energy and tourism,” chief executive Kelly O’Shanassy said.

ACF is challenging federal approvals for Adani’s $16.5 billion Carmichael coalmine in Queensland’s Galilee Basin.

Elsewhere, the report found liquefied natural gas producers were covering their costs but it would take time before they started turning profits.