Weak pricing conditions have combined with rising costs to reduce the profitability of mining in Australia. Australian costs have been driven up by a series of factors, including resource extraction taxes, carbon taxes, elevated demands in labor negotiations, extended regulatory review, and a strong local currency. Production has been reduced in higher cost mines and closures have been announced for several older mines that are near the end of their planned life.Despite this depressed outlook, there is the potential for upside. Natural gas prices in the U.S. have been improving and should continue moving toward the cost of replacement, which the Company estimates is above $4.00 per million BTU’s. As a result, power generation should continue switching back from natural gas to coal, but it is not expected that all of the volume losses will be regained. However, the upside can be extended by utilizing the greater excess capacity available in the coal-fired generating fleet. Exports from the U.S. will be at their second consecutive record level in 2012, and customers are investing in port expansions that can double export capacity over the next five years.
Joy Global Inc. Announces Fourth Quarter And Fiscal 2012 Year-End Operating Results
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