But, according to calculations based on a new McCloskey Group study from Minec's Professor Don Barnett, "Australia's Coal Exports: Prospects for the Future", the viability of some of these new mines faces an imminent threat from Australia's rapidly appreciating currency.

Barnett's numbers indicate that, on current coal prices, some of the emerging mines would struggle to cover costs at an exchange rate of 60c for the A$ against the US$, and most would risk deep red ink at 65c exchange rate.

With the Australian currency hovering around a two year high of US$0.61 last week, calculations like Barnett's should be ringing alarm bells in coal company boardrooms.

The A$ has already gained around 5% in 3 months and is up almost 12% against the US$ since August last year, with many economists predicting a sustained move into the "mid 60's" over the course of 2003.

Were that to happen, much more than just this year's mine expansions would be at risk. The outlook would also be clouded for a further 60-70mt of new Australian capacity planned for the rest of the decade.

Barnett's study is described as one of the most comprehensive and definitive yet produced on the future of the Australian coal industry. It notes the greater currency risks are to thermal coal expansions.

"With current spot prices and exchange rates, a substantial proportion of the 2005 steam coal supply would not be covering total pre-tax costs," the study warns.

While currency is among the more pressing current problems facing Australian coal miners, it is only one of many issues raised by Barnett. His study offers some challenging strategic perceptions of the industry's past and future, leading to some strong warnings on the pace of expansion.

The full study, "Australia's Coal Exports: Prospects for the Future" is available from The McCloskey Group.