The Slump in coal prices is going to have some impacts.
Firstly, for the coal producers themselves, a price at its lowest in three years after a couple of years of high inflation in their input costs means their bottom line will be hammered.
Secondly, a reduction in royalties for the government.
Some uneconomic mines may shutdown all together, some that are marginal will cut production.
Its not just thermal coal, coking coal is currently around $197 a tonne, whereas in August last year it was around the $290 mark.
Both will reduce royalties.
If the demand for coking coal falls, one might expect the demand for iron ore to fall as well.
As coal along with iron ore is one of the few export items that help give us a positive balance of payments, things are not looking rosy in OZ.
Mick
Firstly, for the coal producers themselves, a price at its lowest in three years after a couple of years of high inflation in their input costs means their bottom line will be hammered.
Secondly, a reduction in royalties for the government.
Some uneconomic mines may shutdown all together, some that are marginal will cut production.
Its not just thermal coal, coking coal is currently around $197 a tonne, whereas in August last year it was around the $290 mark.
Both will reduce royalties.
If the demand for coking coal falls, one might expect the demand for iron ore to fall as well.
As coal along with iron ore is one of the few export items that help give us a positive balance of payments, things are not looking rosy in OZ.
Mick
From AFR
