Australia: Queensland’s coking coal production drops 15% in FY22

Australia’s largest coking coal producing region of Queensland recorded a 15% drop in production over the last five years, and by 9% y-o-y in FY22 ended June 2022. Production stood at 135 million tonnes (mnt) in the last fiscal year. Australia’s fiscal year runs from 1 July to 30 June.

The drop in production over the last few years can be attributed to weather-related disruptions. Heavy rainfall in Australia due to the La-Nina weather pattern since the last three years has badly impacted coal production.

China’s informal ban on Australian coal imports in October 2020 also impacted Australia’s metallurgical coal demand. While demand has increased in the Indian market, the absence of Chinese demand has taken a toll on production. China’s share in Australia’s coking coal exports had been recorded at 25% before the informal ban came into effect.

In addition, other factors such as the pressure to comply with emissions norms, local communities’ opposition to pollution from coal mines, lengthy approval procedures for mine life extensions, banks backing out of coal funding, etc. contributed to the drop in Queensland’s coal output.

Queensland’s top 10 coking coal mines

• Goonyella – Riverside and Blackwater mines were the highest coking coal producing mines in FY22; however, their production fell by 19% from FY16.
• Highest growth in production during FY22 was in the Kestrel mine with 45% increase compared to FY16. Similarly, Caval Ridge’s production rose 29%.

Queensland’s top 10 thermal coal mines 

Although comparatively smaller, Queensland’s thermal coal production remained largely stable over the last five years at 81 mnt in FY22.

• The Rolleston mine produced 13.6 mnt 
• Clermont saw a 20% drop in production during the period.
• Newlands’ thermal coal production has more than doubled from FY16

Outlook

Australia’s Queensland coking coal production is expected to remain in a similar range or may even record a decline in FY23, as this year is likely to be marred by another La-Nina event. Also, other factors like higher taxes (hike in royalty rate) and bearish global steel demand over the past few months triggered by the Russia-Ukraine war, are likely to impact the country’s metallurgical coal demand and production.