A continuing focus on efficiency and productivity

A continuing focus on efficiency and productivity

Since KPMG presented the first In the Hunter forum last year, the downturn in the Australian coal industry has continued. More major mining companies have given warning of, or acted on, mine closures, workforce cuts and major asset write-downs. The continual decline in coal prices in US dollars is testing everyone, though the fall in the Australian dollar has cushioned the impact to some extent. The intensity of focus on the balance sheet and financial sustainability now matches the initial attention on the profit and loss. Recent contract negotiations with Japanese customers have further depressed Hunter Valley coal prices and both China and India have announced their commitment to burning less coal in order to reduce emissions, suggesting environmental factors are indeed starting to play a bigger role in shaping future demand – albeit that some uncertainty remains as to whether this will favour Australia’s premium ‘clean’ coal, relative to competitors.

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