HUNTER mining companies are preparing for further falls in coal prices, with some analysts predicting prices will fall below $77 a tonne.
In earlier downturns, Hunter coal companies have cut production or closed mines in an effort to drive up prices.
But after pouring billions of dollars into expanding output in the past five years, production continues to grow despite the falling prices.
Newcastle coal exports for the first three months of 2014 are expected to be about 5per cent up on last year.
In a speech last week, Rio Tinto’s energy division chief executive, Harry Kenyon-Slaney, said the company had cut almost 25per cent from production costs in a little more than a year, while lifting output by 10per cent.
‘‘This is a truly significant step-change in the competitiveness of our business and we’re not done yet,’’ Mr Kenyon-Slaney said.
‘‘With the exception of the health and safety of our people, nothing is off limits.’’
Mr Kenyon-Slaney acknowledged ‘‘an obligation to take real action on climate change’’ but said electricity was the key to lifting people out of poverty, and coal would remain a major source of generating power.
He blamed the strong Australian dollar, high taxes, delayed mine approvals and community opposition to mining for eroding the coal industry’s ‘‘competitive advantage’’.
NSW coalmines had 21,953 production workers in September last year, down from the June 2012 peak of 24,989.
More jobs have gone since September but the total is likely to be well above the 17,727 production workers recorded in January 2010.
Analysts with Bank of America Merrill Lynch said last week that they expected further thermal coal price cuts this year, with prices having halved since 2011 and down almost 70per cent on peaks reached briefly in 2008.
"As global output is now set to expand, we believe the supply overhang will persist and revise our forecast for Newcastle coal lower to $$81.30 a tonne as an average for 2014, down from $$90.10 a tonne previously," Merrill Lynch said last week.
While coal companies rarely comment on trading matters, Chinese buyers apparently defaulted on at least three cargoes of Newcastle coal earlier in the year, apparently as a bargaining chip to secure a lower price in a falling market.
GREEN groups say a new United States study showing elevated levels of coal dust around uncovered coal trains in Seattle supports the campaign for covered coal trains in the Hunter.
The study led by University of Washington academics is published in a Turkish journal, Atmospheric Pollution Research.
The Washington academics had one monitor next to a rail line in residential Seattle, another beside the same line in a rural area and a third as a control in a Seattle industrial area.
All up, the study measured the dust from 372 trains, including 236 freight, 93 passenger and 36 coal.
‘‘Our measurements demonstrate that rail traffic emits substantial quantities of diesel exhaust and that the PM2.5 concentrations are significantly enhanced for residents living close to the rail lines,’’ the study concluded.
Hunter Community Environment Centre spokesman James Whelan said the Seattle researchers reinforced concerns about diesel fumes as well as coal dust.