BHP Billiton Coal President, Mike Henry, speaking at an American Chamber of Commerce lunch in Brisbane, explained how the coal industry could tackle the continuous price declines– metallurgical coal falling an additional 25 – 30% since January 2015 and thermal coal falling by 10 – 15%. He indicated two ways the way the coal industry could overcome the declining prices.
Firstly, he explained concentrating on productivity could improve weak prices.
He said that while the Australian coal industry had been working solidly to improve productivity and trim down costs, more is required to in order to restore the sector to strong profitability.
“The coal industry is an important part of the Australian economy and it has been for more than 170 years. We employ thousands of people in regional areas, we make a significant contribution to federal and state revenues through royalties and taxes,” Henry explained.
“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.”
The second way the coal industry could get past the falling process, according to Henry, is to develop community support from the sector. He said the industry had a responsibility to improve the quality of debate and the depth of understanding about the coal industry.
“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,” Mr Henry said.
Concluding his outlook, Henry emphasised that to enable the coal industry to be competitive in the long term, additional improvements in productivity need to be made.
“We are confident that we and others in industry can rise to this challenge, particularly when supported by the right regulatory reform,” Henry concluded. “Through this we can sustain industry attractiveness in a way that is good for the states, the nation, shareholders and of course good for the more than 152 000 Australians who work in coal or are supported through related jobs.”
Edited from press release by Harleigh Hobbs
Read the article online at: https://www.worldcoal.com/coal/18092015/bhp-billiton-overcoming-declining-coal-prices-2877/