Transport Distance and Australian Coal Marketing

Abstract

The landed cost of coal to the international customer is a major parameter which determines market competitiveness. Rail, port and shipping charges represent 30 to 50 per cent of landed costs for Australian mines selling to Asia. This proportion is higher for sales to Europe, yet it is in Europe where Australian producers are aiming for increased market share and where they are most vulnerable (Clifford, 1988). The objective of this study is to examine Australian export coal competitiveness in terms of transport distance. A study in commodity competitiveness can be highly complex; the approach used examines world coking coal and steam coal production and the transport distances between major exporting regions and importing countries. Reference is made to the importance of land transport costs. Models developed are examined in terms of Australia's exports and an overall conclusion is reached that a reduction in rail freight costs would be an effective measure for improving the competitiveness of Australia's coal industry. it is understood that transport distance is not the sole determinant in what makes a coal type competitively priced. Factors such as labour, fuel, and direct mining costs vary from region to region and change progressively over time. Some aspects of transport costs such as shipping demurrage and cost reductions achieved with economies of scale will also vary. However actual shipping distance from supplier to market will not vary and so this cost factor has been taken as the fundamental parameter upon which to base this competitiveness study. Coal quality will vary from supplier to supplier, and is viewed as an independent competitiveness parameter not in the scope of this paper.

Meeting Name

1994 AusIMM Student Conference (1994: Apr. 28-29, Brisbane, Australia)

Department(s)

Mining Engineering

Keywords and Phrases

Australia; Coal; Exports; Shipping

Document Type

Article - Conference proceedings

Document Version

Citation

File Type

text

Language(s)

English

Rights

© 1994 Australasian Institute of Mining and Metallurgy (AusIMM), All rights reserved.

Publication Date

29 Apr 1994

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