Bowen Basin production costs must fall further: BMA

BHP Billiton Mitsubishi Alliance head of finance Gerhard Ziems has warned that the Bowen Basin coal industry is facing a crisis and coal mines will need to produce more and lower their production costs to stay profitable.
Bowen Basin production costs must fall further: BMA Bowen Basin production costs must fall further: BMA Bowen Basin production costs must fall further: BMA Bowen Basin production costs must fall further: BMA Bowen Basin production costs must fall further: BMA

BMA Head of Finance Gerhard Ziems and Queensland Resources Council CEO Michael Roche presenting at the Bowen Basin Mining Club

Lou Caruana

Speaking to the Bowen Basin Mining Club in Moranbah last week, Ziems said coal prices were the lowest for four years, but the company continued to invest heavily in the Bowen Basin to secure its future competitiveness.

“With a dropping coal price, recently falling 12% in four weeks, and high exchange rates, it’s hard to stay competitive,” Ziems said.

“We can’t control global economics or royalty payments, so BMA is focusing on what we can influence and we are calling it our productivity agenda.

“BMA is rolling out a program of onsite efficiencies and we are increasing coal production to offset major cost burdens and low profit margins.”

His statements were echoed by Queensland Resources Council CEO Michael Roche who said BMA’s experience was being shared across the sector.

“At the moment, you’d be hard pressed to find a coal mine turning a profit,” he said.

“Coal is 14% of Australia’s gross regional economy, take that out and you’re losing a big chunk.

“The biggest challenge is not if someone commutes here (Bowen Basin) to work, it is whether our coal prices stay competitive on a global scale.

“Industry is replacing price with volume to offset costs, amid falling coal prices,” Roche said.

Queensland Resources Council will continue to lobby for the state to spend more of the royalties it receives from mining activities in the mining regions.

And he said the organisation was working hard to counter the misleading orchestrated anti-coal and gas campaigns by organisations such as Greenpeace aimed at closing the industry down.

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