The Institute for Energy Economics and Financial Analysis (IEEFA) says there’s more to the Queensland coal industry’s woes than royalties.
This follows calls last week by BMA and QCoal to shelve the Saraji South and Cook Colliery operations respectively.
In the same week Anglo American revealed workforce cuts of about 200, most Brisbane-based roles, and kicked off a voluntary redundancy expression of interest process with workers at the crippled Grosvenor operation.
On top of this, Burton operations owner Bowen Coking Coal entered voluntary administration last month.
IEEFA Analyst Andrew Gorringe said it had happened before.
“These mines share one thing in common” Mr Gorringe said.
“They are all previously mothballed mines that were shut on the grounds of being uneconomic. So it’s no surprise that after coal prices have declined to historic levels that they are uneconomic again.
“There are various factors that play into the economics equation, but the owning companies have deemed them uneconomic – now for the second time.
“Sold on to other mining companies these mothballed mines were restarted in the hope of windfall profits when the coal prices spiked. No surprise then that now that coal prices have returned to historical levels that these have become uneconomic again.”
Cost Pressures
Rising costs had been impacting the industry for some time and remained high by historical levels, which had squeezed profit margins, Mr Gorringe said.
“A comparison of unit costs for metallurgical (met) coal producers operating in Queensland found that while prices had returned to historical levels, unit costs remained elevated.
“Comparing company reported unit costs from 2018 to the most recent results in 2025, unit costs rose by upto 50 per cent for met coal miners. There are many contributing factors for this, including Queensland’s higher royalty rates. But royalties have risen by a lesser amount than the other cost factors.
“Cost inflation has been reported by miners for several years … many of the cost-increase elements have a longevity about them. There is an increasing risk of costs now remaining higher for longer.”
“They’ve got a cost problem – and royalties are one of those elements – but they’re certainly not the main element. They’ve also been focused on getting volume at any cost. When the prices were good and they wanted to sell as much coal as they could, they expanded with little thought to costs.”
The Bowen Basin was the epicentre for Australia’s met coal exports, Mr Gorringe said.
The premium low-volatility hard coking coal (PLV HVV) coal price, the benchmark coal price index, had tracked at US$182 per tonne for the first 9 months of 2025 according to commodity forecasters S&P Global.
They project long-term forecasts for the coal price will be no greater in 2035, achieving US$181 per tonne, Mr Gorringe said.