Australia coal miners see short term gloom - Mr Clyde Russell9...

Australia coal miners see short term gloom - Mr Clyde Russell
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Mr Clyde Russell a Reuters market analyst expressed that Australia's commodity boom is far from being bust, but the distinct impression at the coal industry's annual conference is that it's definitely on hiatus.

There is always a gap between public pronouncements and private views and actions, and at the Coaltrans Australia conference this week it seemed that this dichotomy has widened in recent months.

Publicly the coal miners are putting on a brave face that despite the slump in global coal prices and questions over the bullish projections about future Chinese and Indian coal demand, they are still on track to invest billions of dollars.

The investments, if all delivered, will almost double Australia's current exports of coking and thermal coal to about 600 million tonnes a year.

However, speak to delegates away from the conference stage and a different picture emerges.

Mr Russell said that "Everybody is still talking a good game, but at the same time rowing back from actual investments," is how one executive at a coal mining company put it.

At the same conference last year, a parade of large and small coal miners presented ambitious plans to develop mega mines in new basins, complete with plans to develop rail and port infrastructure.

This year, the tune had completely changed, with more talk focused on where Australian producers sit on the cost curve, and how only the cheapest projects are likely to get sufficient funding to get up and running.

There was very little mention of the plans to open up the Galilee basin, Australia's largest undeveloped coal reserve.

Perhaps this is because the industry has realized that building huge mines that require greenfield railway lines of up to 500 kilometers and new port terminals is just not going to work in the current economic environment.

The major projects in the Galilee basin, including ones being promoted by billionaire Clive Palmer's Waratah Coal, and India's Adani and GVK, didn't present at the conference.

The one Galilee project that did brief is a smaller venture being run by junior miner Bandana Energy, and even then Chief Executive Michael Gray spent most of his time talking about the company's more advanced projects in the Bowen basin, where there is existing rail infrastructure and new port capacity under construction.

Source - Thomson Reuters