Qld slipping down the productivity cost curve

MORE than 31% of Queensland’s coking coal production has slipped from the second to third quartile in terms of cost of production since 2006 – and the situation for thermal coal is worse, an expert warns.
Qld slipping down the productivity cost curve Qld slipping down the productivity cost curve Qld slipping down the productivity cost curve Qld slipping down the productivity cost curve Qld slipping down the productivity cost curve

Queensland Resources Council CEO Michael Roche.

Lou Caruana

Queensland Resources Council chief executive Michael Roche told a recent industry conference that new developments in the Galilee Basin would have to target first or second-quartile costs to be successful.

Roche said 64% of thermal coal production had dropped into the third tier category.

This compares with 2006 when 60% of thermal coal production was in the second-quartile category. Currently, there is no thermal coal production that is in the first quartile.

Current thermal coal mines are already loss-making, while coking coal mines are becoming marginal, he said.

“Queensland has high construction and operating costs compared with global competitors,” he said.

Skills shortages, industrial relations rigidities also led to unsustainable wage rises, he said.

“Galilee projects must target first or second-quartile costs to be successful,” Roche said.

“Regulatory complexity must give way to rational planning for growth.”

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