Queensland's government expects the Australian state's exports of seaborne-traded coking and thermal coal to surpass 200 million mt for the first time in the current fiscal year ending June 30, budget papers released by state treasurer Tim Nicholls late Tuesday showed.
The forecast total would be an increase of 16.9% from the previous year. "Demand from China has driven double-digit growth in coal export volumes, which are expected to hit 200 million [metric] tons for the first time in 2013-14," Nicholls said in a transcript of his budget speech delivered to Queensland's parliament Tuesday.
Export coal volumes through Queensland's ports were estimated at 171 million mt in fiscal 2012-13, the state's treasury department said in its revenue and expense assumptions budget paper.
The department estimates the state's coal producers will ship 202 million mt of coal in fiscal 2014-15, rising to 214 million mt in fiscal 2015-16 and 224 million mt in fiscal 2016-17.
It is forecasting an average FOB benchmark price for export hard coking coal at $142/mt in fiscal 2014-15, rising to $160/mt and then $170/mt in the two subsequent years to fiscal 2016-17.
Queensland's thermal coal export price is forecast to average $84/mt FOB in fiscal 2014-15, before rising to $89/mt in fiscal 2015-16 and $92/mt in fiscal 2016-17.
Standard grade Australian hard coking coal is currently trading at around $98.25/mt FOB and Australian 6,500 kcal/kg GAR thermal coal shipped from Gladstone port at $76.75/mt FOB, according to latest Platts prices.
The budget did not include any tax increases on coal producers, Nicholls said. His Liberal-National coalition's first state budget in October 2012 imposed a new 15% royalty on coal priced above A$150/mt ($139/mt).
"There are no new taxes in this budget," Nicholls said.
State government revenue from coal royalties, a tiered tax on coal production, is estimated to rise to A$2.07 billion in fiscal 2014-15 and to $2.68 billion in fiscal 2015-16, from $1.83 billion in fiscal 2013-14.
"Falling coal prices are adversely affecting our royalty receipts, and there has been no respite from the Australian dollar, which is stubbornly higher than we would like," Nicholls said in the transcript.
Treasury analysis indicated a 1% move in average export coal prices could increase or reduce government revenue from royalties by A$30 million, while a 1% change in export coal volumes could have a A$20 million effect.
Nicholls in his speech said the state government was mulling selling long-term leases on some state-owned assets as part of its strategy of reducing to A$55 billion from the current A$80 billion. Gladstone port's two coal terminals, railway company Queensland Rail and a number of coal-fired power stations are among assets owned by the Queensland government.