As part of its quarterly Statement on Monetary Policy the RBA has analysed of the cost curves of global iron ore, coking and thermal coal producers.
Looking at Australia’s iron ore producers the RBA concludes that, “at the current spot prices of around US$88, the bulk of Australian iron ore production is profitable”.
The outlook for coking and thermal coal miners however is not so rosy with the RBA concluding that, “at the current spot prices for coking and thermal coal of US$114 and US$69, respectively, given these cost curves, analysts suggest that a sizeable share of Australian and other coal mines producing for the seaborne market may not be profitable”.
Interestingly the RBA says that, “Australian coking coal production spans a wide range of low-cost to high-cost mines”. But thermal coal miners are on a global basis “higher cost than many other producers that are active in the globally traded market”.
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