PERTH (miningweekly.com) – Diversified major BHP Billiton has called for greater productivity in the Australian coal sector, as the prospects of a price rise in the near future remain dim.

Speaking in Brisbane, BHP coal president Mike Henry pointed out that metallurgical coal prices had fallen by a further 25% to 30% since the start of this year, while the price of thermal coal had fallen by another 10% to 15%.

“There are no signs of things getting better in the medium term.”

He noted that, despite Australia’s natural endowment of coal resources, the local sector was facing stiff competition from Russia, Canada and China, which were equally focused on achieving higher output at lower prices.

“They have been expanding production and lowering costs. In some instances, they are achieving mine-site cash costs of $10/t to $20/t less than Australia. Some of the differential has been driven by things we don’t control; like currency movements or geological endowment. But at the end of the day, all that matters is whether we are able to improve productivity sufficiently to secure ourselves at the low end of the cost curve.”

Henry said that the industry had to look to itself to drive the technical and commercial excellence that would ensure that it fully and safely realised the potential of installed capacity.

“The financial sustainability of the Australian coal industry is wholly dependent on our ability to materially improve and sustain levels of productivity to stay one step ahead of our global competition. Through working with our employees to achieve this, within a supportive industrial relations system, we’ll be able to create and protect jobs in the industry.”

He further called for closer ties between the industry, government and community, noting that the Australian coal industry was a significant contributor to state coffers and employed a significant number of people.

“We need to be more active and effective in building common ground with elements of civil society who can acknowledge the future role of coal and the benefits that flow from coal’s ability to underpin affordable energy, and who are open to exploring the possibility that it can be produced and used sustainably.”

Henry said recent research conducted on behalf of the industry indicated that there was a widespread public view that coal use would be phased out over the next 10 to 20 years in favour of renewable energy sources.


“This is in part because of ineffective engagement by many participants in the broader fossil fuel energy value chain. Our lack of alignment and coordinated effort has undermined our effectiveness in engaging broader society on the facts and in advocating for high-quality, balanced policies, including those required to support technological solutions.

“We can only hope to secure balanced support for the industry if we step up and help improve the quality of debate and the depth of understanding about what we do, why we do it, and how important it is. We should be working to address the claims made by those who seek to end fossil fuels and the coal industry, by getting the facts on the table in a respectful, balanced and easy-to-understand way.”

He added that the coal sector had to continue its targeted collaborative efforts and work with government to support sound policies that would foster the accelerated development of important technological solutions to climate change.

“Australia has among the world’s best resources and is located proximate to key markets. We know that there are opportunities for significant further productivity improvements, which will allow for the industry to be competitive in the long term.

“And there is also an opportunity for industry to come together in a way that builds a balanced public perspective on the role of coal in the future energy mix and on climate change and how we can contribute to the reduction of global emissions.”