b'Canberra observed 2019 a good year for resource industriesunless you are mining coalMost resource companies listed on theThe larger companies, with a marketFor those in the coal business, the ASX did really well in 2019; unless youcapital of more than $10 billion all didsituation does not look good. As global are investing in coal projects. The marketwell, particularly Fortescue, which turnedwarming is now a real concern, several capital of the resource companies listeda horror year of 2018 into a big successcountries are abandoning the use of in the top 150 companies increased by ain 2019. coal to generate electricity and there 22% in 2019, and the ASX All Ords IndexThe gold sector has seen someis a surplus of coal available for sale. increased by a similar amount - 21%. Arationalisation affecting the small toFigure 1 shows that the price of thermal gain of over 20% in one year indicates amedium sized companies. For example,coal has almost halved from close to healthy resource sector, and a nationalSaracen bought Barrick Golds 50 per$US120/t in July 2018 to $US66/t at the economy in good shape. We all knowcent stake in the Super Pit at Kalgoorlieend of 2019. The price for coking coal that nothing can grow for ever at 20%for $A1.1 billion. This resource is still oneis also falling and is expected to drop per year, but we should use the goodof Australias biggest gold mines andfrom about $US200/t in 2019 to $US150 times to invest in more exploration forcurrently produces more than 21 millionin 2020.the harder-to-find resources we will needounces per year. Thats worth aboutNo wonder the market capital of in the future. $US30 billion. Whitehaven, Yancoal and New Hope has Table 1 shows how the value of theOn the other side of the coin, OceanGoldfallen.main resource-listed companies inexpects a lower output after itThe Department of Industrys, Resources the top 150 ASX fared during 2018.suspended production at its Didipioand Energy Quarterly for December The numbers in the table are in $Agold and copper mine in the Philippines,2019, painted a sober picture for coal billions, show the percentage changesciting a dispute with local government,(https://www.industry.gov.au/data-and-in market value during 2019 and howwhich allegedly wants to close the minepublications/resources-and-energy-these compare with the 2018 results.down. This will result in an annual dropquarterly-december-2019). It stated The companies have been groupedin production about 55 000 ounces ofthat:according to their main commoditygold from an expected output of 525000 interest. ounces. The US coal sector has been impacted by a number of Table 1.Market Capital Changes for 2019.bankruptcies, as lower prices eliminate profit margins and as coal-to-gas switching accelerates Jan 2019 Dec 2019 Change % % 2018 in the US power sectorcoals BHP 100.011 116.773 +17 +2 share as a source of power Rio 28.984 38.053 +31 -10 generation fell to 23.5 per cent in Fortescue 12.788 33.868 +165 -23 August from 28.3 per cent a year before. US exports look set to fall further in the outlook period as Yancoal 5.156 3.855 -25 -13 coal mines shut.Whitehaven 4.514 2.567 -43 -3 His Departments report did not New Hope 2.759 1.720 -38 +30 seemtoworry the Minister Matt Canavan, who announced on 19 Woodside 29.348 32.951 +12 +1 December 2019:Origin 11.401 15.128 +33 -32 The $2 billion Carmichael mine Oil Search 10.878 11.313 +4 -11 is now in construction and Santos 11.393 17.414 +53 -1 will produce 10 to 15 million Beach 3.064 5.861 +91 +2 tonnes of high-quality thermal coal a year, ramping up to 27.5 million tonnes. Adani already Newcrest 16.187 22.780 +41 -9 has 800 people working across Evolution Min 6.794 6.39 -6 +53 Queensland and the company Northern Star 5.908 8.176 +38 +62 estimates the Carmichael project will create around 1500 direct Ocean Gold 2.966 1.73 -44 +41 construction jobs and almost St Barbara 2.464 1.91 -22 +25 7000 supporting jobs. More jobs Regis Resources 2.426 2.19 -10 +11 will be created as the mines Saracen 2.337 3.551 +52 +67 capacity grows.Overall the medium-term outlook All Ords 5716 6936 +21 -8 fortheresource sector looks good Market Capital 274.89 336.11 +22 -3 andthe volatility that we experienced several years ago appears to be Iron ore + other Coal Petroleum Gold reducing.FEBRUARY 2020 PREVIEW 26'