Dean Dalla Valle, president of Australia-based BHP Billiton's global coal business, has emphasized the importance of reducing costs and maximizing productivity to stay profitable. He was speaking at the Committee for Economic Development in Australia (CEDA)'s Energy and Resources series in Brisbane about the global outlook for coal.
"BHP Billiton's coal business includes 20 metallurgical and energy coal operations across five countries. In the 2013 financial year, we produced 154 million mt on a 100 percent basis," Mr Dalla Valle said. In the financial year 2012-2013 Queensland accounted for approximately 27 percent of the company's total coal production and 79 percent of its metallurgical coal production.
Mr. Dalla Valle said BHP Billiton expects global growth in demand for both energy and metallurgical coal over the coming decades, with productivity key to generating acceptable returns.
Regarding the global coal markets, the BHP coal business president indicated that most of the company's commodities have been subject to some decline in prices over the past 18 months and coal has been hit by this fall in prices too. He went on to say that, on the metallurgical coal front, since 2009 prices have fallen from more than US$300/mt to around US$105/mt.
Mr. Dalla Valle explained that, in part, prices have been impacted by an increased supply of coal from the US, China, Canada, Russia and Australia.