The world’s biggest coking coal exporter says it doesn’t see coal prices lifting anytime soon.
BHP Billiton doesn’t expect coal prices to rise anytime soon.
Coal prices have fallen sharply in the past 18 months with China, US, Canada and Russia flooding the steel-making market, and new player Indonesia swamping the energy market, the company’s coal president Dean Dalla Valle said on Wednesday.
“It’s tough out there. It’s hard to see any relief in the short term certainly when you have such strong supply,” he said at a business lunch.
Adding to the coal market’s difficulties were high operational costs in Australia, Mr Dalla Valle said.
BHP paid 1.5 times more for a truck operator in Queensland than in New Mexico, he said.
“We must always remember that the world sets our prices and Australia sets our costs,” he said.
The head of BHP’s coal business offered no details on reports the company was considering setting up a separate $20 billion company comprising its aluminium, bauxite and nickel assets.
Mr Dalla Valle said no decision had been made as the company strives to simplify its portfolio.
“There’s no doubt we consistently review this and we’ll always test it for value for shareholders,” he said.