Coking coal has sunk to a spectacular new low of $105:
That has BHP up in arms. From the AFR:
Speaking in Brisbane on Wednesday, Mr Dalla Valle said a global company like BHP was well-placed to see the differences in cost across different nations.
He said truck drivers at the Queensland coking coal mines were “1.5 times” more expensive thant ruck drivers on BHP’s mines in New Mexico, USA.
“This highlights the productivity and cost challenge we have in Australia,” he said.
“The world sets our prices, Australia sets our costs.”
More misleading “he said, she said” journalism. Although I agree we have a wages issue in some areas of the resources space, just because BHP says so doesn’t make it fact. How about some context? For instance:
- are the mines more remote here and likely to attract higher wages?
- is the coal easier and cheaper to extract here, less overburden etc?
- is the cost of getting the coal to market cheaper here?
- is the coal of the same quality and end-point price?
- what about the maniacal demand over-projections and over-investment of management that stirred wages?
I could go on but you get the point, quoting a simplistic wage comparison is propaganda. Most Australian production is far cheaper than North America:
We’re biting deep into that cost curve now!
