IN COMPETITION: Open-cut mining at Mount Thorley in the Hunter Valley. Picture: Dean OslandFOR the coal industry, 2014 was not a stellar year.
In the Hunter, mines were shut and jobs were lost as prices continued to tumble.
Environmentally, the battle lines are increasingly resolute as residents oppose a number of mine expansions or extensions and the climate change arguments against coal and other fossil fuels continue.
But throughout it all, coal exports through the Port of Newcastle set yet another annual record.
When the calculations are finally calibrated for the year, Newcastle exports will have hit 156million tonnes, 4per cent up on the 2013 total of 150million tonnes.
LIMITED SUPPLY: Mines and studs vie for land near Denman. Picture: Dean Osland
Exports are expected to increase, again, during 2015.
So what is happening?
Having invested heavily over the past decade to take advantage of what were then record-high prices, the Hunter industry is now geared to producing far more coal than was the case, pre-boom.
But infrastructure like coal loaders and rail lines are almost always funded by debt, which must be repaid by income generated by the greater level of demand.
So as long as demand for the product can be sustained, the Hunter will continue to export coal, in generally ever increasing amounts, regardless of what happens to the price.
Earlier in 2014, when the Australian dollar was still worth more than US90¢, it was widely estimated more than half of the coal being exported from NSW and Queensland was doing so at a loss.
Coal is sold internationally in US currency, and with the Aussie now worth about US80¢, and expected to slide lower, the return in our currency is another 10per cent higher, easing the pressure on struggling producers.
Figures published by the private consortium now running the Port of Newcastle show by the end of November, 143.2million tonnes of coal, worth $12.47billion, had been loaded into 1545 ships for export in the calendar year.
BLOCKED: Hearings into the Drayton South mine extension ended in its denial.Picture: Ryan Osland
Based on federal government price estimates rather than the ticketed values of the cargo, this income equates to an average price, for the first 11months of 2014, of $87 a tonne, which at current exchange rates gives a coal price of $US70.60 a tonne.
The final edition of Australian Coal Report for 2014 says Japanese power companies – who have traditionally paid top dollar for Hunter coal – are paying no more than $US73.50 ($90) a tonne. But these contract sales are well below a ‘‘spot’’ price for one-off sales of $US62 ($76.25). And these prices are well above the rate for coal going into China, which has grown as a market to account for 20per cent to 25per cent of Newcastle’s exports.
Lower-energy coal to China has been typically selling for as little as $US52 ($64) a tonne.
The same journal noted Whitehaven had predicted production costs for its Maules Creek mine of between $62 ($US50.40) and $64 ($US52) a tonne.
Although production is still increasing it did not rise as fast as previously predicted, leading to further delays for the controversial fourth Newcastle coal loader, T4, and a number of coal producers complaining about the impost of ‘‘take or pay’’ port and rail charges that were set on the run-up to the boom.
Mid-year, the Thai-owned Centennial Coal and the South African-founded, London-based Anglo American both complained of the ‘‘take or pay’’ impost, but Pacific National – which hauls about two-thirds of the coal to Newcastle – said the complaints were exaggerated.
‘‘Take or pay’’ is no longer the heated problem it was, suggesting the falling dollar has helped ease the pain, and rail companies may have quietly eased the charges without announcing the fact.
Environmentally, most applications by coal companies are still being approved, but 2014 saw some high-profile refusals in the form of the Drayton South and Mount Thorley Warkworth mine expansion or extension proposals.
Anglo American has resubmitted a smaller proposal for Drayton and Rio Tinto is still pushing to mine through a ridge of land it had previously pledged to leave alone as a barrier between the mine and the nearby village of Bulga.
Proponents say rejection will cost thousands of mineworkers their jobs, while opponents point to the massive size of modern open-cut mines and the degree of environmental damage that results.
As a prediction, 2015 may well see a debate on the potential for a renewed focus on underground mining as a way of avoiding the worst dust and noise impacts of open-cut operations.
For regardless of the impost being made by renewable energy technologies, every credible forecast of global power demand shows coal supplying 40per cent or more of the world’s electricity needs for decades to come.
And with power consumption growing dramatically in the New World, global coal consumption has risen from 4.7billion tonnes a year in 2000 to 7.7billion tonnes in 2012, with the International Energy Agency predicting 9billion tonnes a year by 2019.