As Mark Twain might have put it, the death of Australian coal has been wildly exaggerated.
Less than a year after Australia’s coal industry was widely viewed as being in serious trouble, a startling reversal of fortune has occurred, with the spot price for coking (steelmaking) coal up threefold since January, to about US$233 a tonne, and prices for thermal (electricity) coal up 80% since January, to US$86 a tonne.
That’s good news for the nation’s finances. According to Deloitte Access Economics, every US$1 rise in the coking coal price delivers a $65 million boost to the Australian budget. Deloitte says coking coal exports in the December quarter should add about $1.7 billion to government revenue, and potentially $7 billion if prices persist for a year.