The Hunter Valley coal chain is among the largest coal mining areas of Australia. The port of Newcastle has seen rapid financial development and is now the world’s biggest coal exporting port. Of late, the demand and price of coal have seen a steady downswing. This has led many of the existing coal mines to downsize. Over the years news reports have shown that nearly ten thousand jobs have been lost either directly or indirectly because of these lay-offs.
Not just miners
It is not just the miners and their families that are affected by the loss of jobs. Many other small businesses built around the mines like restaurants, service centres, fuel stations, and other local shops and businesses are also direly affected. If jobs are slowly lost in the same manner, the towns surrounding the mines may become ghost towns as people may have to leave elsewhere in search of work.
Economics of it all
This has come at a time when coal prices have dropped dramatically in Australia, almost 50 to 70 percent. Analysts of Bureau of Resource Energy Economics (BREE) have pointed out that the main reason for this fall was the demand for coal from Asia a few years back, which forced the development of infrastructure to accommodate the perceived demand. The slump in Chinese demand for coal after only a few years put a strain on the now expanded capacity, which could not be fully utilized. The resulting over excess supply eventually shot down prices.
Carbon tax has also taken stabs at the industry, with nearly 800 million dollars going towards it in the last year. The government is expected to intervene with some new policies for those who have been laid off. Some strategies of financial development can sustain the towns until the mines can be functional again.
Cautiously optimistic about the future
The new mine in Queensland is touted to be the biggest mine in Australia. It promises new jobs, but BREE has also noted that growth cannot be as quick and that the upswing will take it’s time. The export of coal has grown between 2012 and 2013. The recent slumps can bounce back as export of coal and financial development is expected to get stronger in the coming years.
The main consumers of coal are thermal power plants and iron and steel industries. BREE has pointed out that the world will never stop demanding steel and power, so exports will improve as expected and the financial development of Hunter Valley will get back on track. Until then there is very little that the laid off miners can do but wait.
For all businesses in the Hunter Valley, now it an important time to be careful with your finances. If companies have any issues with cash flow, then business loans may be able to help. Through planned financial development, the Hunter Valley region can take the brunt of these tragic lay-offs now and look to create a more secure financial future.