Three years ago, pictures of bulk carriers queued off the coast of Mackay in central Queensland were framed as evidence of a “renaissance” in the coal industry.
There were more than 70 coal ships in the offshore gridlock in December 2017. This year there are just 12 waiting – equalling a record low mark set at the height of the coronavirus pandemic.
At the world’s biggest coal export port in Newcastle, no China-bound ships are waiting or scheduled to load before Christmas. More than 50 ships carrying Australian coal are reportedly waiting off the Chinese coast.
In the face of falling coal prices and volumes, the industry and governments have remained bullish about coal’s long-term prospects. They say twin pressures of the pandemic slowdown and China’s ban on Australian coal will ultimately pass.
In an apparent show of faith, the Queensland government took a 9.9% stake in the float of Dalrymple Bay Infrastructure (DBI) – one of two large terminals in Mackay, the main hub for exports from the Bowen Basin. The investment was welcomed by the resources sector as “a clear vote of confidence … in the role of resources in Queensland’s Covid-19 recovery and economic growth for decades to come”.
DBI was launched on the Australian stock exchange this week with government backing and the broader market surging. It was the second biggest Australian IPO this year (the largest, tech company Nuix, gained 63% on debut last week). DBI also promised investors a handsome 7% dividend.
When the stocks hit the market, DBI tanked, down 16%. It gained no ground the following day. Investors were not buying the pitch that coal has a rosy future.
“It’s a pivotal moment,” says Tim Buckley, an energy markets expert at the Institute of Energy Economics and Financial Analysis.
“The financial markets do move so much faster than the real world, they are all about constantly reevaluating the risk-return and growth prospects.
“There’s no long-term growth prospect at all for the [coal] industry. It’s like trying to catch a falling knife.”
The bleak outlook
Australia’s biggest super fund, AustralianSuper, has committed to hitting net zero emissions across its $200bn investment portfolio by 2050 – but has not specifically ruled out investing in coal projects.
Nonetheless, its chief executive, Ian Silk, seems less than enthusiastic about the idea.
“The economic outlook for coal stocks generally is incredibly bleak, for obvious reasons,” he says.
He says Aussie would approach any particular coal project on its financial merits.
“But it’s pretty plain by the way we’re so underweight coal that that’s not an attractive sector,” he says.

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