Published: August 26, 2016 |

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Mining companies in the Mackay region can breathe a little easier as the latest data released by the World Bank shows the thermal coal price has risen to its highest level in more than two years.

At a current price of $89.79 per metric tonne, figures show thermal coal has risen by more than 16 percent since June.

The increase has been attributed to a rising demand for Queensland’s higher quality thermal coal, according to Resource Industry Network chairman Tony Caruso.

“China has imposed strict restrictions on the coal they import and India is also looking for higher quality coal,” Mr. Caruso said.

“Australian coal is known to be high quality and meets the criteria other countries don’t.

“The high quality also means it’s cleaner burning, so that’s what they’re all looking for.”

He said while prices for coal were always changing, people should not get too excited about the recent spike as they were still low compared with the “boom” period.

The overall price of thermal coal has been in decline for the past five years after achieving a high of $129.15 per metric tonne in September 2011.

Queensland Resources Council chief executive officer Michael Roche agreed, saying while a price increase was welcome, the global market was still “over-supplied” meaning few impacts should be felt in the short term.

Renewable energy advocacy groups are also in favor of the price increase, with Researcher at The Australia Institute Tom Swann saying higher prices for local coal is a great reason to support a global temporary halt on new mines.

“Stopping new mines would support higher prices for longer and protect jobs at operating mines, under existing approvals,” Mr. Swann said.

“It is clear that opening enormous new mines would counteract this trend, putting downwards pressure on prices.”

Not all mines are expected to benefit from the price increase, however, as only those which sell at current market rates, or “on spot”, are likely to receive any benefits.

Companies which agreed to earlier contracts, which sets a fixed rate, are unlikely to see any short-term gains.

Mr. Caruso said while the price increase would not lead to new mines being opened, or existing ones staying open longer, it would ease some of the pressure on companies’ margins.

He said there should be some flow-on effect to local suppliers and services which would hopefully benefit from the rise.

“Basically it provides a bit of relief for everybody,” Mr. Caruso said.

According to the World Bank, the last time thermal coal reached a higher price was February 2014, when it was trading at $91.21.

INITIAL: THE price of thermal coal has risen to its highest level in more than two years.

It has increased by more than 16 percent since June to reach $89.79 per metric tonne.

The latest World Bank data shows the last time thermal coal reached such levels was in February 2014, when its trading price was $91.21.

The overall price of thermal coal has been in decline for the past five years after achieving a high of $129.15 per metric tonne in September 2011.

Source: (August 23, 2016) Daily Mercury

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