One-third of coal mines operating in Australia's Queensland state are operating at a loss, industry group Queensland Resources Council said in a report Monday.

About 60 mines are operational in the state, indicating around 20 mines are unable to cover their cash costs from incoming revenue, the report said.

Of the 37 metallurgical coal mines in the state, one in four has negative operating cash flow, representing about 29 million mt of production when based on a spot market price of $80/mt, the report said.

The situation is worse for Queensland's 22 thermal coal mines, as 12 are out of the money based on a seaborne market spot price of about $50/mt.

QRC commissioned the study from resources consultancy Wood Mackenzie.

QRC CEO Michael Roche said the data reflects stark anecdotal evidence from the industry. The industry group has members such as BHP Billiton and Rio Tinto.

"While the cost curves and profitability analyses provide hard data on the state of our sector, the opinions of the industry leaders in Queensland -- many of them veterans of 30 or more years -- tell the story more starkly," Roche said.

A participant in the survey said mines would be facing closure if it were not for the weakness of the Australian dollar, which has helped to offset lower coal prices to some degree.

OUTLOOK 'BLEAK'

"We are in uncharted territory," said a survey participant in the report. "It's as bleak as it's ever been."

In the past two years, the mining industry in Queensland, which is predominantly coal-based, has shed 21,000 jobs as a result of low commodity prices, despite mine production touching historically high levels.

Industry employment in Queensland's mining sector is now down to about 60,000, he said.

"Companies tell us they are bringing a forensic intensity to bear as they conduct a deep dive into all their costs," said an extract from the report.

Roche has called for government action to help the sector.

"We are not looking for bailouts or subsidies, but our entire sector needs certainty and support in the shape of commitments to reduce red tape and unjustified government imposed and government-sanctioned costs," said Roche.

Roche warned of more job cuts for the coal sector.

"I am not going to sugar coat the situation. More resources jobs will be lost over the next few months," he said.

--Mike Cooper, michael.cooper@platts.com
--Edited by Meghan Gordon, meghan.gordon@platts.com

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