QLD Mining and Energy Bulletin
Issue link: http://ebook.aprs.com.au/i/42546
QUEENSLAND RESOURCES COUNCIL MARCH QUARTER 2011 of their international competitors. The CPRS EITE provisions are very punitive and will shield only 33 export activities or about 16-19 percent of exports. Compare this to the European Union Emissions Trading Scheme EITE provisions, which will shield 164 sectors and 73 percent of exports. As with the hugely discredited Resources Super Profits Tax, the QRC is worried that the industry will once again be foisted with a carbon pricing policy that is ill considered. We encourage governments at all levels to engage the resources sector around the full implications of proposed policy decisions, and work harder to deliver mutually beneficial policy outcomes. THE QRC PRODUCTION INDEX The QRC production index is a composite weighted index that tracks percentage increases and decreases in the total production of Queensland bauxite, alumina, aluminium, coal (all saleable), copper, gold, lead, silver, zinc, oil, gas, and electricity (NEM) quarter to quarter. The index at the end of the December 2010 quarter (latest available data) reached 99 index points, nine percent lower than the previous quarter (June 2006=100). This was due in main to the large decrease in coal production emanating from the severe wet weather in the latter half of 2010. Saleable black coal production dropped significantly from 51.28 Mt to 42.50 Mt in the December quarter. Minor falls in production were recorded for alumina, aluminium, and lead whilst moderate increases were recorded for bauxite, copper content, silver and zinc production. The QRC in its December quarter forecast that black coal saleable production would be approximately 30 Mt lower in 2010/11 (against a 204 Mt BAU) under a 'low impact' or 'no more significant wet weather' scenario. At December 2010 average benchmark prices, 30 Mt equates to $5.2 billion less production in 2010/11. The QRC estimates that this will be at a cost of around $450 million in royalties to the state government and about $4.4 billion in lower gross state product. Unlike past flooding events where production has resumed promptly, the QRC anticipates that these production impacts will be felt beyond 2010/11 and will extend into 2011/12. Assuming no more significant wet weather, advice from companies and recent port data suggests that our 30 Mt 2010/11 impact estimate of is likely to be realised. The latest aggregated port data collected from Hay Point Port, Abbot Point Coal Terminal, Gladstone Coal Terminal and Port of Brisbane shows that coal throughput is 30 percent, lower in the March 2010/11 quarter than the same quarter in 2009/10. © QUEENSLAND RESOURCES COUNCIL 2011 100 110 120 130 140 Floods 80 90 GFC QRC Production Index (Quarterly) (Index base June 05/06 = 100) Floods Source: ABARESand QRC THE QRC VALUE OF PRODUCTION INDEX Comprising the same basket of goods as the QRC production index, the QRC value of production index combines domestic production and average global benchmark prices to track percentage increases and decreases in the total value of production. The QRC value of production index at the end of the December 2010 quarter decreased 30 index points to 130 (June 2005/06 = 100) or in real terms A$9.4 billion. The decrease in value of production was primarily on account of the significant decrease in coal production and slight easing in metallurgical and thermal coal prices, which when combined, lowered the coal sector's value of production by almost $2.5 billion. Despite the Australian dollar averaging $1.01 against the Greenback during the December quarter, value of production increases were recorded for aluminium, copper content, gold, silver and zinc as prices continued to climb on account of strong global demand and constrained supply. QRC Value of Production Index (A$) (Quarterly) (Index base June 2005/06 = 100) 280 230 180 130 80 30 Floods Floods GFC Source: ABARESand QRC THE JAPANESE SITUATION Not widely reported in the media was the heavy damage to Japanese coal-fired power and industrial plants and coal importing ports as a result of the March 2011 earthquake and tsunami. Reports suggest that eight coal-fired power plants in the Tohoku and Tokyo regions were shut down during S ta te of the Sect or Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10