While Australia’s labour costs grew by 8% last year they soared by 13% in China last year, Wood Mackenzie research found.

China, which is emerging as a significant net importer of coal, now has the fastest rising coal production costs in the world. This will continue to grow because of the appreciation of China’s currency against the US dollar and higher wages being paid to coal miners in central Chinese mines.

China’s costs have risen as its fragmented coal industry consolidates into major state-owned companies like China National Coal and Shenhua and greater attention is given to safety and retaining quality employees through higher wages.

Woodmac believes it would be cheaper for the Jiangsu, Zhejiang, Guangdong, Fujian, Hainan and Shanghai municipalities and provinces to source 90% of their coal requirements from overseas by 2015.

“By 2015, our modelled scenario shows that 857 million tons of coal could be imported into China below the 90th percentile of domestic Chinese coastal supply costs,” it said.

Australia, with its abundant supplies of thermal and coking coal, could stand to benefit if it can cap wages growth and remain competitive with other emerging producers such as Indonesia.

BHP Billiton chief executive Marius Kloppers has said that managing wage costs will be a high priority as negotiations continue over enterprise agreements with unions in its Central Queensland mines.

Last year he said BHP Billiton was suffering a “lag” effect of the commodity boom, which led to costs for labour and contractors contributing to $US878 million extra in costs in the previous financial year.

“For us, there are two aspects that we always emphasise when we talk about total labour productivity, or total cost per unit,” Kloppers said.

“One is what does it cost for a unit of labour [and] the second item is, what are you able to produce out of the unit of labour?

“So what we have seen, particularly on the capital side in Australia, is that we have had negative impacts, or the industry has had negative impacts, on both those elements.

“So labour has become more expensive and unbalanced. It has become less efficient.

“Again, that’s why the company is on the record as saying an ongoing focus on productivity, which is the combination of the unit cost and the unit efficiency, is a very important thing.”