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4 Pages

Australia: Is it time to shut down?


Australia: Is it time to shut down?

Report summary

The majority of coal mines in Australia have been able to withstand lower coal prices and avoid closure. The fixed cost nature of infrastructure charges ('The pain of take-or-pay'), is one of many factors that has made shutting down even more expensive than producing coal at negative margins. As a result, negative margin producers have an incentive to maintain or increase output, instead of opting for production cuts or mine closure. We estimate that 4 million tonnes of Australian coal...

What's included?

This report includes 2 file(s)

  • Australia: Is it time to shut down? PDF - 435.41 KB 4 Pages, 1 Tables, 3 Figures
  • Is it time to shut down.xls XLS - 208.03 KB

Description

This Coal Insight report highlights the key issues surrounding this topic, and draws out the implications for those involved.

Participants, suppliers and advisors can use it to look at the trends, risks and issues within the coal industry and gain an alternative point of view when making decisions.

Wood Mackenzie is the only coal industry service provider that offers a market outlook integrated with other sector analyses, including macroeconomics, coal supply, steel markets and gas and power markets.

Our coal analysts are based in the markets they analyse. They work with objective, proprietary data to help you maximise your current and future decision making. From market dynamics to trade patterns, we give you confidence in your strategic planning.

  • Executive summary
  • Assessing the shut-down decision
  • Mines at risk of shutting down

In this report there are 4 tables or charts, including:

  • Executive summary
  • Assessing the shut-down decision
    • The likelihood of mine closure depends on cost structure and the flexibility of the operator
  • Mines at risk of shutting down
    • Negative margin tonnes at risk of shutting down (Base case pricing scenario 2013)
    • Tonnes at risk grows considerably under lower coal price scenarios
    • Assumptions and Impacted Production
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