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| David Lennox says the industry is in structural decline and that the same goes for its investment value. (ABC News: Khama Reid) |
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All bar one of Australia's top 10 coal miners recorded large losses and massive write downs in the last financial year.
It has been the fourth year of diminishing returns for one of the country's biggest exports, and analysts have said it shows the shift away from coal to renewables.
Mr Morrison recently sent a direct message to super funds on commercial radio, telling them to invest in coal.
"Some industry funds, for example, won't allow their funds to be invested in coal shares," he said.
"Now that's got nothing to do with returns, necessarily, that's got to do with politics."
Mr Morrison made the remarks in relation to his recent decision to block the sale of the New South Wales electricity grid to a Chinese bidder.
He went on to suggest that Ausgrid and the coal industry were all worthy investment options for Australia's super funds.
"I think Australians, and the Prime Minister and I, are frustrated that we're not seeing more of that $2 trillion in capital, which is there in super savings, not lining up on these sorts of transactions," Mr Morrison said.
Tim Buckley, the former head of equity research with Citi Group, and now with the Institute of Energy, Economics and Financial Analysis (IEEFA), said Australia's top coal miners had written off $4 billion in the 2015-16 results.
"Our oil and gas companies have written off $9 billion — and that's real dollars, that's US dollars — in the last reporting period.
"These guys are down a collective $US1.2 billion ($1.6 billion) in the last 12 months. I think the numbers speak for themselves.
"If you are investing in coal companies in the last five years, in America you would have lost 99 per cent of your money. In Australia, you probably would have only lost 70 per cent of your money, so to me the comment is ludicrous."
'Industry is in structural decline'
Commodity prices are known to fluctuate, said David Lennox, from the financial investment company Fat Prophets.
He said he believed the industry was in structural decline and that the same went for its investment value.
"We are starting to see other energy commodities, such as natural gas, moving into what we would primarily have once been their domain, and that is the generation of electricity," Mr Lennox said.
"So going forward one would have to suggest as we see other energy sources — such as sunlight and also wave and also wind — starting to generate electricity, that would cause some structural changes to what's happening with the coal sector."
Mr Lennox said he did not advise Australians to place their retirement savings in coal.
"One would have to suggest … that the coal sector was not the best of places to invest one's superannuation," he said.
"That's primarily because we have seen from about early 2011 a steady decline in the thermal coal prices.
"What that does is unfortunately … put a strain on the financial results of coal companies.
"And it also does require them to adjust the values of their assets, and unfortunately those adjustments are generally impairment charges and we've seen those values fall.
"We really did see that as a standout for the coal sector in 2016."
Energy market shifting
Emma Herd, CEO of the Investor Group on Climate Change — which represents institutional investors managing over $1 trillion — said the sector's poor profit results and major write downs reflected a shift in the world's energy markets.
"Partly as a result of climate change and environmental policy decisions that are being made by Australia, [and] by our key trading partners, and in our key export market," Ms Herd said.
"This very much goes with the changing nature of the global energy sector, so the role of coal, the role of fossil fuels, the emerging roles of renewable, are all moving pieces in the puzzle at the moment, which are affecting the investment outlook."
Ms Herd did not agree with the idea that Australia's super funds were avoiding coal for political reasons.
"I think investors are always looking for a good return and a good investment opportunity, and are looking at a range of new and emerging renewable energy and investment options in the Australian market," she said.
"But also in regional and offshore markets as well we are seeing significant growth, particular in the Asia Pacific region where renewable energy is a pretty chunky investment growth opportunity."
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