It came as a surprise to many this week that BHP Billiton proudly opened a new coal mine when the business has bled money in the last two years.
Coal has become as much of an ugly word for investors as it has for activist opponents that have hated the dirty energy source for years.
The Queensland Resources Council says conditions are the worst in more than a decade.
BHP and partner Mitsubishi are viewed as being stuck with the unwanted new mines, but coal president Dean Dalla Valle told workers at its new $US1.4 billion Daunia project this week he saw good long-term demand for metallurgical coal.
That would be a relief to the hordes of fly-in fly-out workers and residents of Moranbah – recently named Queensland’s most expensive town – which is completely dependent for its existence on coal mining.
BHP is the world’s largest seaborne coal exporter, employing 10,000 people in the region and 30,000 globally, but coal contributed only 3.5 per cent of $US21 billion in earnings before interest and tax (EBIT) last year.
BHP shut two mines in the same region as Daunia, contributing to the 7000 Australian coal jobs that have gone plus $5 billion in cancelled projects.
So have things changed for the better for coal in less than a year, which remains Australia’s second-largest export earner?
In terms of prices: no. Coking coal was down to four-year lows of $US145 a tonne this week, well down on the record $US330 of 2011 and prices that were still above $US200 last year.
BHP has cut coal costs significantly by $US800 million to $US3 billion with unit costs believed to be now under $US100 a tonne.
Demand is down from buyers such as China, India and Japan who use the coking coal to make steel, while supply is strong from China, the US and new kid on the block Mozambique
“I still see a good long-term demand trend for metallurgical coal albeit with the near term challenges,” Mr Dalla Valle told reporters at Daunia’s opening.
BHP invited along Queensland Premier Campbell Newman to open the mine, who it battled with last year when he hiked coal royalties as the price fell but who vowed not to raise them again this week.
He took a swipe at Australians opposed to mining, mentioning Greens voters in Melbourne and Sydney in particular.
“If you shut down the coal industry it would hurt your standard of living and means we wouldn’t be able to pay for schools and hospitals, your roads and other infrastructure that people expect of government,” he told reporters.
UBS mining analyst Glynn Lawcock said BHP had spent too much on the new mines – about $US5 billion – to cancel them now.
He predicted two new BHP coal mines would be written down in value.
“They misread the market a little bit in terms of price and built them probably at a time when capital intensity was very high,” he told AAP.