The spot price for thermal coal has fallen 25 per cent per cent in the past month with one leading analyst saying it is because of a reduction in demand and a fundamental global shift to renewables.
Thermal coal plants like Redbank in the Hunter Valley are hoping to attract investment from green investors by shifting to bio-energy fuel sources.(Supplied: Hunter Energy)
Mining analyst Tim Buckley, from the Institute of Energy Economics and Financial Analysis, said the fall had "left a significant number of Australian and Hunter Valley thermal coal producers under water and globally there is a significant impact".
He estimates 60 per cent of global coal production is now unprofitable and 30 per cent of Australian producers are also running at a loss.
The chief executive of the New South Wales Minerals Council, Stephen Galilee, acknowledged the industry faced challenging times ahead, but said he expected good prices to return, especially as key markets like China resumed normal activity after COVID-19.
"We're a cyclical industry, we've seen low prices before … and the issue now is how long these prices will be sustained," he said.
- An energy analyst estimates 30 per cent of Australian coal producers are running at a loss
- A mining industry executive says there is a strong future for thermal coal
- Westpac is moving towards a zero emissions investment policy
Read the full article by Mike Pritchard and David Claughton in ABC Rural published 151th May 2020