He said Chinese government subsidies to its coal producers and the growth of the Mongolian coal industry would make Queensland coal more uncompetitive if cost pressures were not reined in by the industry.

“The reality is that most QRC coal members are well down the track of extensive cost reviews,” Roche said.

“Further job losses are a certainty.

“The bottom line in 2012 is that many Queensland coal producers are now generating cash losses.”

Roche said it was not only thermal coal mines but also the more high-margin Queensland coking coal producers which had made some huge losses so far in 2012.

“Six years ago, about 40 per cent of Queensland’s thermal coal tonnes were from mines operating in cost quartiles 3 and 4,” he said.

“Today, almost double that tonnage is stuck in quartiles 3 and 4.

“For coking coal, the situation isn’t much brighter with the significant emergence of cost quartile 4 mines.”

A major risk to Queensland coal’s competitiveness is its inherently high input costs.

“These are largely down to unsustainable wage rates as companies compete for skills in a small labour pool,” Roche said.

“To be honest, we must concede that we have been our own worst enemy in the way we have bid up the cost of labour and materials.

“The federal government’s Fair Work Act has not helped matters either.

“Key construction inputs are escalating as multiple projects monopolise scarce inputs and as a consequence, we are left with declining productivity that is further eroding our competitiveness.

“The costs of production in Queensland and Australia are far greater than in other coal-producing jurisdictions causing significant movement up and along the global cost curve.”

Roche said China seemed to be providing the floor for Australian hard coking coal pricing in the spot market.

“The falling international price seems to have been driven by dramatic falls in Chinese domestic coking coal prices,” he said.

“What is particularly disturbing is news from China about the subsidies propping up their local producers.

“We hear, for example, that Chinese coking coal producing provinces Shaanxi and Henan have suspended some coal-related fees and charges in a bid to help local miners cope with persisting market weakness.

“The relief measures are said to include the reduction of railing and tollway fares.

“This will allow Chinese domestic production to further reduce costs and therefore prices, to keep or increase market share.”

The effective subsidisation of Chinese coal producers further weakened Queensland’s competitive position, Roche said.

In July Mongolia supplied China with the majority of its coking coal requirements.

“It may be a case of making hay while the sun shines on a northern hemisphere summer,” Roche said.

“However, I am also hopeful that the message will get through to our politicians and the wider community that we do not hold all the cards when it comes to coal.

“There is a fundamental misconception in the community that Australia controls or exerts enormous influence over world coal usage when the reality is starkly different.”