More than half of thermal coal mines are operating at cash losses due to low prices, the until-recently high Australian dollar, elevated royalties, cost blowouts and the impact of the carbon tax, according to The Australian Financial Review.
Research commissioned by the Australian Coal Association (ACA) suggests Australian coal mines are increasingly unable to compete with rival mines elsewhere.
“I think [the coal industry] is in crisis,” former Macarthur Coal chairman Keith De Lacy told the AFR.
“It is running into a perfect storm.”
The research, conducted by consultants Wood Mackenzie, suggest more than 20 per cent of Australian coking coal mines have negative margins and 52 per cent have margins of less than $10 a tonne at current coal prices, including royalties and capital necessary to sustain production, the AFR added.