Recovery from Queensland floods longer than expected: Treasury

Queensland’s coal mines are still struggling from high water levels, but iron ore and thermal coal production in New South Wales is strong, according to the Treasury.

In its latest quarterly economic round-up released on Saturday Treasury said QLD’s coal operations would continue to be hurt by last summer’s weather right through to the end of 2011.

"General indications are that coal operations in Queensland will continue to be affected throughout the rest of 2011, although this is not expected to affect the broader recovery in the sector," it said.

According to the report some mine dewatering operations were dragging on "for longer than originally expected".

But it said prospects for the mining industry remained strong, and the recent global turbulence was not expected to affect investment plans.

It said increased competition for skilled labour was driving higher wages and more flexible conditions for mining jobs.

But its business liason program, which met with 27 businesses and organisations in August, said the gap between the mining industry and other parts of the economy was widening.

"Since the last round, the divergent outlook for the mining and non mining parts of the economy has become more pronounced, driven by increasing weakness in the ‘goods’ sectors, notable manufacturing and retail," it said.

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