Since 2011, hard-coking coal had plunged in price from $US290 ($NZ367) a tonne to about $US140 ($NZ177). Similarly, lower-grade thermal coal (on Newcastle prices) for energy generation has gone from $US121 to a tonne to about $US94.
Hard-coking prices in 2008 were 60% higher at $US350, a period when Solid Energy was investigating several speculative fossil fuel alternatives, and in 2011 were still about $US330.
However, Solid Energy was plunged into crisis in March because of the declining global coal price, leaving it shedding hundreds of staff and revealing about $390 million of debt. Bathurst is fighting its way through the courts over consent challenges, which has stalled it by about 18 months.
State-owned enterprise Solid Energy and Bathurst are neighbours in the Buller and Denniston Plateau areas above Westport, on the West Coast, with both mining a high grade of specialist hard-coking coal crucial for steel making; especially in the emerging economies of China and India.
Craigs Investment Partner broker Peter McIntyre said China's coal consumption remained ''key'' to New Zealand exporters, but highlighted market instability reflected in buyers purchasing ahead by only one month at a time, instead of by the quarter.
''The forward contracts are the key; it's the quarterly contracts which offer stability,'' to producers, Mr McIntyre said.
He said the price settlement, for the second quarter to June, was ''surprisingly high'' at $172 a tonne and he expected buyers to pressure producers on price to better reflect the likely conditions of the third quarter.
While overall global prices could remain depressed, Craigs research noted Chinese imports were on track to rise by about 30% this year, underpinned by strong domestic steel output and a ''greater availability'' of coking coal from Australia.
Mr McIntyre cautioned that downgrades in Chinese economic growth forecasts were likely this quarter, including liquidity constraints and the Chinese Government's concerns about overcapacity and asset values.
Similarly, economic growth in India and Brazil had been ''disappointing'' and a price recovery later in the year could be undermined by India and Brazil's combined consumption.
''With prices below $US140 a tonne the consequences for the coking-coal industry could be quite severe,'' the Craigs research said.
While prices could be depressed, Mr McIntyre was ''cautiously confident'' that both India and Brazil's imported coal growth would be about 8% during 2013.
As with the price of gold plunging, to about $US1250 ($NZ1584) in recent days, several years of increasing energy costs for goldminers have slashed profit margins close to the bone.
Oceana Gold in late June announced the mothballing of its Reefton open-pit mine operations, affecting 260 jobs, because of the declining price. Several of the other major producers have reined in projects and capital expenditure worth billions of dollars during the past six months.
About half of Solid Energy's annual 4 million-tonne coal output was the export-quality hard-coking coal, while the majority of Bathurst's targeted 3 million-tonne output will be hard-coking coal, Mr McIntyre said ''If coal prices get much lower, I'd be surprised if many of the high production-cost operators can keep going,'' Mr McIntyre said.
Solid Energy has already shelved underground coal mining on the West Coast for this reason, saying it was commercially unviable.
