The chief economist of Queensland’s Department of Natural Resources and Mines says there are some signs of recovery in the coal sector.
David Rynne told industry leaders in Mackay, in the state’s north, he feels the industry has reached the bottom of the price cycle.
He said forecasts suggested the price of both metallurgical and thermal coal would begin to recover gradually through until 2018.
The department is projecting the price of metallurgical coal will rise to Australian $180 per tonne, from its current contract price of about $130.
However, he said the strength of the sector relied heavily on the value of the Australian dollar, which should ideally be about 20 per cent lower than the greenback.
Mr Rynne said the outlook for thermal coal was not as good, and said the sector would “remain in the doldrums”.
He said costs of production had fallen back to close to pre-boom levels and Queensland producers remained globally competitive.
However, there are concerns about the number of high-cost operations in the state, which could become unviable.