BHP Billiton’s chief executive, Marius Kloppers, has told British journalists that “it is very difficult to visualise, given the current set of conditions and outlook, that any mining company can approve new capital in the coal business at this point and get a return”.
He said that “a very substantial chunk of the energy coal production and a sizeable proportion of the metallurgical coal production” on the Eastern Seabord is “non-cash generative at today’s cost structures and prices”.
His comments follow a statement from China’s State Council on Tuesday that China will spend $372 billion on energy conservation projects and other measures over the next three-and-a-half years as part of a drive to cut energy use and reduce coal consumption by 300 million tonnes.
Ironically, these statements have come at the same time as the $6.4 billion GVK-Hancock Coal project at Alpha in Queensland’s Galilee Basin has received federal government approval. The Alpha project is co-owned by the Indian company, GVK, and billionaire miner Gina Rinehart.