The Queensland Resources Council (QRC) has launched its first quarterly report of key data charting the performance of the State’s minerals and energy sector.
According to the report, coal mining input costs in the State at the end of 2008 were at an all-time high, with mining capital expenditure increasing from $1 bn to $1.5 bn between the September and December quarters in 2008.
The report also found that exploration expenditure in Queensland decreased 13% to $94.9 m in the December 2008 quarter, with the trend expected to continue well into 2009, with exploration expenditure down a forecast 44% by June to $54 m.
Launching the State of the Sector March quarter report at a business forum in Brisbane today, QRC Chief Executive Michael Roche said it was important that more Queenslanders become more familiar with the performance and outlook for the resources sector.
“With data confirming that the sector directly and indirectly contributed $41.3 billion to gross state product and employed more than 191,000 people in 2007-08, every Queenslander has a stake in the future of the resources sector,” Roche said.
“Minerals and energy production is the cornerstone of the State’s economy and through this quarterly report, we’re planning to bring the sector’s performance and outlook into sharper focus.”
The inaugural State of the Sector quarterly introduces the QRC production index and QRC price index, which will track the collective performance of Queensland’s major resource products — bauxite, alumina, aluminium, coal, copper, gold, lead silver, zinc, oil, gas and electricity — against a June 2006 baseline.
Other indicators including input costs, capital expenditure and minerals exploration have been incorporated into the report along with a snapshot of the sector’s socio-economic contribution and its response to the global financial crisis.
“The next edition of the State of the Sector covering the June quarter will also contain a Chief Executive’s sentiment index that will provide a forward-looking insight into the issues occupying the minds of industry leaders in Queenslanders,” Roche said.
State of the Sector March Quarter Report: Key Indicators
The QRC production index
The QRC production index is a weighted index that tracks percentage increases and decreases in the production of Queensland bauxite, alumina, aluminium, coal, copper, gold, lead, silver, zinc, oil, gas and electricity.
With June 2006 as the base period (ie=100) the QRC production index in the March 2009 quarter is projected to reach 91 index points because of global conditions, and particularly, reduced demand.
Between June 2008 and March 2009, production decreased by 17%.
The QRC price index
Using the same basket of goods as the QRC production index, the QRC price index in March quarter 2009 is projected to reach 204.
Between June 2008 and March 2009, prices increased by 81%, largely on account of strong (contract) coal prices and a low Australian dollar. However, significant decreases in most other resources were recorded.
Looking beyond the March 2009 quarter significant decreases in the index are expected, especially from April 2009 as coal contract prices are renegotiated (particularly with Japanese customers). There are also projections that the Australian dollar might recover slightly.