Queensland coal mine flood losses ramp up

first_imgThe first industry-wide analysis of lost coal production resulting from severe flooding has reinforced the gravity of the blow to the economy, Queensland Resources Council Chief Executive Michael Roche said today. Releasing the QRC’s quarterly State of the Sector report, Roche said the extent of losses to the industry and Queensland in the form of foregone coal royalties would be determined by the speed at which normal production can resume.“The emptying of coal pits full of rainwater and the restoration of rail and road transport are central to ensuring losses are minimised,” Roche said. “It’s not a pretty outlook for the industry or Queensland.“However, as the coal industry demonstrated after the 2008 floods in central Queensland and during the global financial crisis, it can bounce back and must, in the interests of the Queensland and Australian taxpayers.”Against a quarterly ‘business as usual’ baseline of 51 Mt of coal production (export and domestic) in Queensland, QRC analysis reveals that production in the March 2011 quarter is expected to fall by at least 25% and up to 50% under a ‘high impact’ scenario.“The translation of the lost production data into lost earnings is a daunting reminder of the size of the challenge confronting Queensland and Australia,” Roche said. “The state government will be missing out on coal industry royalties of between A$1.6 and A$2.9 million a day for the rest of the financial year. The analysis is also forecasting a hit to Queensland’s Gross State Product in 2010-11 of A4.5-8 billion.“To put that into perspective, Queensland’s GSP grew by A$5.6 billion between 2008-09 and 2009-10, meaning that even at the lower end of the scale, the impact of the floods could see almost a whole year’s worth of Queensland’s economic growth lost.”Roche said that while prevailing high prices for coal would provide incentive for Queensland miners to move back into production quickly, the price benefits could flow straight to global export competitors if a concerted effort was not directed at de-watering Queensland mines and restoring transport links.The State of the Sector report can be accessed at http://www.qrc.org.au/_dbase_upl/SOSDec10_web5.pdflast_img read more