CANBERRA: The surge in the coal price could add as much as $29 billion to Australia’s export revenues if maintained over a full year, which could be boosted by $15 billion if the stronger price for iron ore is included. This is according to an assessment by HSBC which reckons the unanticipated rebound could lift inflation along with wages growth, prompting the central bank to keep interest rates on hold.
“The coal and iron ore stories together add up to a decent sized boost to the Australian economy,” the bank’s economists Paul Bloxham and Daniel Smith said. “The sharpness of the rise in the coal price is unmatched by anything we have seen since the second leg of the upswing in the commodity prices super-cycle in 2008-09.” The bank’s report came as established coal miner Whitehaven Coal said it expects the coal price to remain strong through the December quarter following recent settlements in Asian markets, which is helping it to reduce borrowings.
