Aussie miners ready to carry economy out of recession

AUSTRALIAN gross domestic product may have dropped by 0.3% in March and we may officially be in recession for the first time since 1991, however, the coal mining industry has propped up the national economy before and during the COVID-19 crisis and will continue to do so after it has passed.
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Many pundits went into panic mode when COVID-19 hit, declaring the Australian economy was doomed. The Australian dollar consequently sank like a stone.

However, those people were overlooking the strong and unflagging contribution of coal and the mining industry.

According to the latest ABS stats for production chain volume measures, mining grew 4.1% from March 2019 to March 2020. This compares with agriculture, which declined 10.1% during that period and construction, which declined 3.7%.

In the March quarter, which is when COVID-19 really started to hit, mining production only declined 1%.

While there was a 4.7% fall in coal mining during this period that was due to production disruptions from adverse weather conditions, not the virus crisis.

For the most part, Australian coal miners got on with the job while ensuring their employees remained safe and free of COVID-19. Two suspected cases of COVID-19 in the Queensland coal mining industry turned out to be false alarms.

Mining companies, their suppliers, and the entire infrastructure network was adaptable and resilient enough to deal with the disruptions COVID-19posed.

For example, rail and infrastructure group Aurizon this week declared it was sticking to its earnings forecasts despite the impact of COVID-19 on global coal markets.

Looking to the post-COVID-19 future, it is mining that is again ready to hit above its weight.

The Queensland Resources Council will join the Queensland Industry Recovery Alliance to work with the government to maximise the resource sector's role in the state's COVID-19 recovery.

QRC CEO Ian Macfarlane said the resources industry had to adapt to COVID-19 and was preparing itself for its aftermath.

"We have worked within the restrictions on worker movement to slow the spread and keep as many of the 372,000 Queenslanders who rely on us for their work and pay on the job," he said.

"Already, we have secured some interim relief for exploration companies that are the key to the new coal, metal, gas and oil discoveries. We have finalised an agreement to inject a jointly funded $100 million into resource communities."

Before COVID-19, the resources industry was injecting more than $200 million into the Queensland economy every day.

Hogsback reckons the Queensland and the entire Australian economy now needs as much of that money as possible to prime the pump of recovery.