Queensland is heading for a coal mining boom, but analysts are not convinced that it will last.
Despite current strong coal prices, overseas demand isn’t likely to increase any time soon. The push to address climate change and clean energy will alter the export demand dramatically. If global climate change is fully addressed, it is believed that coal production will drop by at least 2/3 in the next 20 years.
Prices are good for coking coal in 2018, but demand won’t always be as healthy as it is now. It is estimated the boom could last another year or two then plateau for three to four years and drop off again.
China is, of course, Australia’s biggest coal customer, however as they move forward into more advanced technologies, and cleaner energy options, coal will become less and less needed. China has placed restrictions on its own coal processing, which in turn has created strong prices for Australian coal. However, as they move towards renewable energies, the timeline for strong coal prices and solid demand in Australia is limited.
Although the future of coal as an export commodity for Australia looks good for the next five or ten years, we have to prepare for its demise. There are no doubt other areas of the mining and resources sector that are building rapidly, with the requirement for batteries on a global scale tipping to the next resources boom in Australia.
The Queensland Resources Council released a new report detailing the Mining & Resources Sector’s contribution to the economy, and notes that the sector continues to drive jobs growth and investment in communities with a $62.9 billion (up 14 percent) contribution to the State’s economy in 2017-18, said the Queensland Resources Council (QRC).
QRC Chief Executive, Ian Macfarlane launched the ninth annual economic contribution report at the Port of Brisbane with Senator Matt Canavan, Minister for Resources and Northern Australia.
Mr Macfarlane said the report reaffirms the importance of the resources sector to the Queensland economy and Queensland communities.
“Resources have delivered double-digit jobs growth supporting 316,267 full-time positions after a 12 percent increase over the last year. It’s not just diesel fitters and port workers but also butchers and chefs, lawyers and environmental scientists who have a job connected to the resources sector in communities across Queensland,” Mr Macfarlane said.
“Our sector has a resolute commitment to working with local communities and delivering the benefits from our natural resources to all Queenslanders. Resource companies have contributed to 1,260 community organisations which is up 38 percent on last year. Community organisations provide vital services to all Queenslanders.
“Over the past nine years, the sector has contributed almost $600 billion ($594 billion) which is larger than the economy of Hong Kong.
“All of the industry’s economic contributions were achieved while operating within a strict environmental management framework and using only 0.1 percent of Queensland’s land mass.
“The return from our resources sector is strong and consistent. Our most recent data shows the sector is responsible for one in every five dollars in the economy and one in every eight jobs. It’s essential we have stable and reliable regulation to attract new investment and continue to lift the State’s prosperity.
“Brisbane is still the biggest mining town in Queensland supporting 142,447 jobs and contributing $28.9 billion (up 12 percent) to the State’s economy, which is three times more than Mackay.
“Every Queenslander – regardless of where they call home – shares in the wealth of the sector through the royalty taxes paid to the State Government, which grew by 12 percent to $4.3 billion.
“These royalties provide funding for new hospitals, police stations, and schools or the wages of 63,000 teachers or 61,000 police or 64,000 nurses.”
QRC President Rag Udd said continued investment in the resources sector was essential to keep the sector competitive.
“Our sector makes up almost 20 percent of the Queensland economy but we must not get complacent. We must embrace technology to stay globally competitive, compete for every contract and earn the support of our governments and the people who elect them,” Mr Udd said.
Mr Macfarlane said an important chapter of the economic contribution story was the sector’s reach across the State.
“From Toowoomba to Weipa the sector is employing locally and buying locally spending $19.3 billion with Queensland suppliers – an increase of 19 percent.
“In the Far North, bauxite developments have seen the economy surge 77 percent to $959 million while achieving massive Indigenous employment targets. Indigenous participation in our sector has grown to 4 percent which is a genuine representation of the State’s 4 percent Indigenous population,” Mr Macfarlane said.
“In the North West, the State Government’s North West Minerals Province blueprint helped drive a 25 percent increase in total jobs to 9,641 and added $1.7 billion to the economy (up 31 percent).
“It was more good news for coal with total employment rising 14 percent to 215,656 and the metals industry saw all employment grow to 50,179 (up 37 percent) contributing $9.3 billion to the economy (up 51 percent).
“Coal was the largest overall contributor accounting for 69 percent of economic contributions, followed by metals at 15 percent and oil and gas at 13 percent.
“This report illustrates international markets see Queensland coal as an essential ingredient in steelmaking and energy production. It shows the world wants our bauxite, copper, gold, silver and zinc for electric vehicles, renewable energy and smartphones while our gas is feeding the energy needs of Asia and beyond.
“Queensland is in the box seat to be Australia’s resources superpower for decades to come, which will be welcome news to every Queenslander.”