(Minews) - Australian thermal coal miner New Hope said Thursday it is axing 5% of its workforce, or 30 jobs, at its West Moreton mine and corporate office in Queensland, as it struggles with the current downturn in the coal industry.
The news seem to confirm global investment bank Goldman Sachs’ predictions, indicating the window for profitable capital spending in new thermal coal mining and infrastructure capacity “has closed.”
In a study published last week, the bank analysts said that with Chinese demand for imported coal past its peak, demand for seaborne thermal coal will grow a mere 2% a year on average to 2018. This, they added, will leave coal prices too weak to generate profitable investment from new mines and infrastructure.
That means any new large-scale coal projects in Queensland’s Galilee and Surat basins could struggle to secure investors, as costs surpass the coal price for many miners.
Gloomy outlookGoldman Sach’s is not alone. A recent study from Oxford University — commissioned by HSBC's Climate Change Centre of Excellence — speculated that Australia's coal investments are at risk of becoming “stranded assets” as China tries to curb its coal consumption. Energy giant BP also predicts slowing demand for coal.
There has been a recent wave of job losses, mine closures and cost cutting among Australian-based thermal and coking coal producers, including BHP Billiton, Glencore and Vale.
BHP, which through its partnership with Mitsubishi Corp. is the world's largest coking-coal exporter, has already closed several mines, including its Norwich Park and Gregory operations in eastern Australia citing weak prices.
Glencore announced in March that it would shutter its Ravensworth underground operation this year. And earlier this month, Brazil’s Vale fired500 coal miners and shut down operations in NSW Hunter Valley.
Shares in New Hope, Australia's largest-listed pure-play coal miner by market value, closed down Thursday 6¢ or 2% at A$2.92.
