Better than the gold rush: How Australia is booming while share prices plunge

Queensland’s listed companies have had a dire 12 months with share prices diving across the board, but at least one economist thinks we are in a time of enormous wealth that is better than the Gold Rush.

Jul 01, 2022, updated Jul 01, 2022
Share prices have plunged but Australia's terms of trade were better than the gold rush. (Image: Molly Sime/Unsplash)

Share prices have plunged but Australia's terms of trade were better than the gold rush. (Image: Molly Sime/Unsplash)

Among the winners is a small coal company in a long-running legal battle ASIC but which has had a remarkable 12 months.

Terracom, which owns the Blair Athol coal mine as well as others in South Africa, has ridden a boom in coal prices to record share price growth of 339 per cent for the financial year.

The hike in Queensland’s royalties for coal certainly had its impact but miners have had a spectacular year with Bowen Coking Coal up 250 per cent for the June year and New Hope, another coal producer, had a 93 per cent jump.

Stanmore jumped 212 per cent to add to the lustre of the coal sector.

Also in the mining sector, but well away from coal, Austral Resources was up 194 per cent. Superior Resources was up 260 per cent. Iron ore hopeful Hawsons Iron jumped 138 per cent.

One of the few companies outside mining to have a positive year was beef producer Australian Agriculture whose share price jumped 58 per cent in the year.

So dire was the sharemarket’s year overall that one of the better share price performers was the Broncos. Its shares were up 85 per cent, but relatively few people benefit because it only has about 5 per cent of its shares actively traded. The rest are tightly held by its major shareholders including News Corp.

The ASX 200 fell 10 per cent for the year, but the market is not the economy and Morgan’s Financial economist Michael Knox said Australia was in an era of unprecedented wealth.

“This economy we are sitting is going through a major boom,” Knox said.

While he said Australia’s growth may slow “there is not remotely possible that Australia will go into a recession in the current climate.

“The RBA Governor (Philip Lowe) has said the Australian terms of trade is the highest it has ever been in the data history going back to the 1850s,” he said.

“There has never been a more beneficial time for international trading in our export commodities than right now.

“It’s bigger than the 1950s and it’s a bigger boom in export prices relative to import prices than the Gold Rush which generated enormous wealth.”

A major factor in the price boom has been coal.  Thermal coal has hit as high as $US402 a tonne recently.



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