THE Hunter’s mining boom may not be over, but the region’s steaming coal prices are certainly off the boil.
This week the spot price dipped below $US90-a-tonne, well down from recent heady highs.
A lower coal price – if sustained – means some mining prospects may be less viable. It means less frantic urgency among mine owners striving to push their product through the Port of Newcastle, and that means less pressure to add to ship-loading capacity.
Port Waratah Coal Services has been quick to declare that relatively subdued demand is not the main reason for its deferral of construction of its giant T4 loader project on Kooragang Island.
According to PWCS, ‘‘a short-term dip in the market’’ is no reason to ignore the underlying ‘‘trend of steady expansion’’ in Newcastle’s loader capacity.
Instead, the organisation has blamed engineering difficulties at the site – a former steelworks dump – and alleged shortfalls in rail track capacity.
Chances are, the T4 investors may have also cast an eye over global trading conditions. The Eurozone economy is battling severe problems, with many suggesting these could get much worse before they start getting better.
Europe is China’s biggest export market, and a slump in European demand could have serious effects on the Asian giant’s output and employment.
That, in turn, could flow on to Australia – one of China’s major sources of energy and raw materials.
Reduced demand for raw materials means lower prices, reduced mine viability and, if the slump persists, closures and layoffs. With so many eggs now piled in the resource industry basket, a serious mining slowdown would create a major readjustment problem for Australia.
It is far too soon to promulgate such doomsday scenarios for Australia’s economy. Circumstances remain relatively buoyant by present global standards.
But few would blame any organisation with a billion-dollar resource investment plan on its books for pausing, at least slightly, until world economic conditions become a little clearer.
It grows on trees
LAKE Macquarie councillor Kay Fraser is merely giving voice to the thoughts of many constituents in querying the cost of some civic projects.
To the untrained eye, $1.37million certainly seems like a high price for tree planting in Charlestown. Council staff, in reply, have pointed out that the 370 actual trees to be planted represent only about 10 per cent of the sum.
That seems a little beside the point. On the figures provided, the council appears to be prepared to spend $3702 to plant each tree. Even taking tree guards and spoil removal into account, that seems a hefty sum by ordinary standards.
Then again, most people wouldn’t spend $8400 on a pair of recycling bins, fire and graffiti-resistant or not.
Some ratepayers may be starting to suspect that local government procurement occurs in an alternate reality.