The Queensland Resources Council (QRC) notes that while some metal miners have announced plans for new capacity, the coal industry faces the challenge of having to reduce costs in the face of the continued strength of the Australian dollar and low prices, which are not expected to rebound strongly because of soft demand and strong global supply.
The flow on to the exploration sector is evident in the struggle for investment dollars owing to cautious equity markets and leaner internal budgets tightened to manage cash flows. These vulnerabilities are likely to result in more job losses over the next 12 months (predominantly for coal).
The QRC has calculated that in 2011/12 the resources sector injected into the Queensland economy some A$36 billion in wages, goods and services spending and community contributions. This is the highest level recorded over the past three years of analysis, easily surpassing the A$25.5 billion total from 2010/11.
In recognition of this contribution, the QRC’s most recent public opinion polling by Crosby Textor Group shows that the sector enjoys a strong social licence to operate with four in five Queenslanders supporting the resources sector.
Just as important is recognition by the public that the sector is vulnerable, and governments must take action to protect jobs and revenues. Nearly two-thirds of Queenslanders believe that the state should do more to protect the resources industry in order to create jobs and generate revenue.
To this end, the QRC says it “will continue to prosecute its reform agenda, acknowledging the Premier’s November announcement at the QRC Annual Lunch that the Resources Sub-Committee of Cabinet will continue to operate in 2013.
“However, there are promising signs of some strengthening in the coal sector, with Queensland export volumes showing steady growth in the first six months of 2012/13. Overall, Queensland’s coal exports reached 168 Mt in 2012 compared to 153 Mt in 2011.
“Just as the coal sector shows some tentative signs of recovery, the anti-coal movement continues its relentless campaign to undermine this mainstay of the state’s resources sector, ranging from hoax media releases to ‘concerned citizen’ newspaper ads calling for a cap on our coal exports. The text of the ad was long on global warming angst, but lacking in basic economics. The Australian Financial Review editor captured the flawed logic perfectly: “limiting Australia’s coal exports would do nothing apart from reduce our share of the coal market, cut national wealth and tax receipts, and raise coal prices for others.”
There is a concern with the Newman government’s signalled approach of using statutory land-use planning to resolve perceived widespread land use conflicts between agriculture and the resource industry.
As QRC commissioned opinion research reveals, the overwhelming majority of the population is satisfied that the two sectors can co-exist and that agriculture alone cannot sustain strong regional economies.