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Coal's glory days draw to a close as inflation adds to mining woes

Business

Queensland’s prime export commodity, the premium coking coal from the Bowen Basin, has experienced dramatic price falls of more than $US400 a tonne ($A570) since March-April.

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One of the state’s biggest coal producers, Stanmore Resources said the trend in high prices had begun to soften at the end of the June quarter as steel demand was hit by supply chain disruptions, a reduction in demand and a recovery in production by Australian mines.

Premium hard coking coal was receiving prices above $US650 a tonne in the March-April period, but this had fallen to around $US220 a tonne in July, which was still a high price for the commodity.

The prices being received would still put Queensland producers into one of the higher royalty tiers that were announced in the State Budget and have been subjected to widespread criticism in the mining sector.

Stanmore, which recently bought BHP’s stake in the BMC joint venture, said the additional cost measures from the royalty regime would discourage investment. It also said the economic environment was changing.

“Inflationary cost pressures are being increasingly experienced particularly with energy related costs and general consumable prices,” the company said.

“General tightness in the labour market in conjunction with labour supply impacts from Covid-19 are also impacting costs.”

Chief executive Marcelo Matos said the market was still volatile.

He said the Stanmore had been affected by wet weather, but its production in May and June was in line with guidance.

 

 

 

 

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