New South Wales minister for mineral resources Kerry Hickey has described the change in market conditions for the state's coal producers as a "remarkable change of fortune".
In an address to the NSW state parliament, Hickey said coal spot prices had risen by 70% in the space of a few months, driven largely by a hungry Japanese market.
“In recent years, our thermal and coking coal producers have suffered at the bargaining table,” Hickey said.
“They have been hit by the surging Australian dollar and low prices brought on by cheap Chinese and Indonesian imports."
However, Hickey said the price spike had outstripped the rising Australian dollar.
“Last year, thermal coal prices hovered around the $US27 per tonne mark,” he said.
“Now thermal coal spot prices have climbed to over $US50 a tonne, with coking coal up around $US80 a tonne.
“This is an enormous jump in prices dictated by buyers hungry for our coal.”
According to Hickey, Japanese utilities and steel manufacturers are looking at NSW as a major source of coal supply.
As a result the minister was set to make a visit to Japan this month to consolidate the state's trade position as a preferred supplier and to encourage continued investment from Japanese companies in the New South Wales coal and minerals industries.
Japan is NSW's largest overseas market for export coal, taking more than 42 million tonnes, or 54% of total coal exports from the state annually equating to $2 billion in income each year.
Hickey will meet with many of the state's largest customers and industry representative bodies and make site inspections of coal research and utilisation facilities at the Chiba industrial area at Tokyo Bay.
Idemitsu runs the coal research and utilisation facilities and Hickey will also visit the Ultra Clean Coal test combustion facility with White Industries and Mitsubishi Heavy Industries.
“These meetings and site visits present a face-to-face opportunity to promote our coal industry and the potential for further Japanese investment in coal and minerals development,” he said.
“It is important that we discuss the issues affecting our relationship with Japanese customers and investors.”
Australia’s Mining Monthly
