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Jan 18, 2011

Japan thermal coal contract may reach $145/T in 2011- Macquarie

PERTH, Jan 18 (Reuters) – Major Japanese utilities may be
forced to pay nearly 50 percent more than a year ago for their
largest annual thermal coal contracts as floods in Queensland
push prices higher, according to an analyst report released
Tuesday.

The price for the key Japanese fiscal year thermal coal
contract could settle at $145 per tonne, up from $98 per tonne
for the same contract last year, Macquarie Research said in the
report.

Jan 18, 2011

Only 15 pct of Queensland coal mines fully operating

SYDNEY/PERTH, Jan 18 (Reuters) – Only 15 percent of the 57
coal mines in Australia’s Queensland state are fully operational
after devastating floods, with damage to the industry estimated
at A$2.3 billion ($2.3 billion), an industry body said on
Tuesday.

Australia accounts for about two-thirds of global coking
coal trade, with around 90 percent of that coming from
Queensland, and the disruptions have pushed global prices
sharply higher as buyers scramble for alternative supplies.

Jan 14, 2011

Cyclone and floods hit Asia-Pacific commodities

SYDNEY (Reuters) – A tropical cyclone forced five mines in New Caledonia producing 4 percent of the world’s nickel to shut on Friday, while flooding in Australia shut in millions of metric tons in coal and aluminum exports.

Severe weather is raising the cost of raw materials, potentially fuelling inflation in the industrial heartlands of Asia, which rely on the commodities to produce steel, generate power and make everything from bathroom fixtures to airplanes.

Jan 13, 2011

Asia Coal-Australia thermal coal prices hover near $140/tonne

PERTH, Jan 13 (Reuters) – Australia’s thermal coal prices,
a benchmark for Asia, hovered near $140 per tonne as prices
continued to be supported by flooding in coal-producing
Queensland state.

Thermal coal on the globalCOAL Newcastle index for the
week to date was $138.58 per tonne on Wednesday, up from
$129.50 a week earlier as the impacts of the flooding
intensified.

Jan 12, 2011

Australia floods cut 5 percent of world coking coal supply

SYDNEY/PERTH (Reuters) – Australia’s devastating floods could remove over 5 percent of steelmaking coal from world markets this year and lift prices by a third or more, analysts estimated on Wednesday, as damage and disruption to coal infrastructure continue to spread.

Australia’s Bowen Basin coal district, the heart of the coking coal industry in Queensland state, is slowly emerging from floods that have since raced south, but recovery has been slow, with one Queensland coal port closed and two restricted.

Jan 11, 2011

Australia floods close more coal mines, rail line

SYDNEY/PERTH, Jan 11 (Reuters) – Australia’s
flood-stricken coal sector suffered more setbacks on Tuesday
as monsoon rains flooded out another rail line and forced more
collieries to close.

New Hope Corp — until now untouched by the
flooding that affected the operations of more than 40 coal
mines further north — suspended all operations on Tuesday as
the rains transformed southeastern districts into inland seas,
shutting another 6 million tonnes of thermal coal capacity.
[ID:L3E7CB021]

Jan 11, 2011

Q+A: Australia’s coal industry hit by Queensland flooding

PERTH (Reuters) – Flooding in Australia’s northeast has hit the country’s $50 billion coal mining sector hard, paralysing much of the coal industry in Queensland, which produces over half of the country’s coal.

Below are a few facts about how the coal industry has been impacted:

WHAT KIND OF COAL IS AFFECTED BY THE FLOODS?

Queensland, Australia’s largest coal producing state, produces mostly coking or metallurgical coal used for steelmaking, but it also produces some thermal coal, which is used for power generation.

Jan 6, 2011

Australia coal sector recovery seen taking months

PERTH, Jan 6 (Reuters) – Australia’s $50 billion coal export
industry is likely to take months to recover fully as miners
face torrential rains and flooding that have nearly halted coal
production and infrastructure, a Reuters snap survey showed.

In the survey of industry analysts on Thursday, most said it
would take a month or more for Australia’s coal industry, which
contributes two-thirds of global coking-coal exports needed to
make steel, to return to pre-flood levels.

Jan 6, 2011

Draining flooded Australia mines could take weeks

ROCKHAMPTON/PERTH, Australia, Jan 6 (Reuters) –
Australia’s flood-stricken coal industry faced lengthy
disruptions on Thursday, with one miner saying it could take
weeks to drain its pits of water and a major port suspending
export shipments because of a lack of coal.

Floods have swamped mines in Queensland state, paralysing
operations that produce 35 percent of Australia’s estimated
259 million tonnes of exportable coal. Australia contributes
two-thirds of global coking-coal exports, needed to make steel.

Jan 5, 2011

Australia’s Dalrymple coal stocks up but could face depletion

SYDNEY/PERTH, Jan 5 (Reuters) – Australia’s largest coal
export terminal, Dalrymple Bay, tripled its coal inventory to
around 700,000 tonnes on Wednesday as floodwaters receded,
allowing more rail lines from Queensland state’s collieries to
operate. But logistical problems caused by the floods in Australia's largest coal producing state persist, with some lines hauling coal from Outback mines expected to remain at least partially underwater for another week -- longer if the rains return. The worst flooding in decades has affected an area the size of Germany and France and created an archipelago of towns plunked amid a muddy inland sea. Analysts are forecasting higher coal prices in months to come as coal users scramble to find supplies elsewhere. Port officials at Dalrymple Bay are also worried that coal stocks will drop again if the mines are unable to resume production soon and inventories run out, bringing much of Australia's $25 billion coal export industry to a halt. Seventy-five per cent of Queensland's mines are currently not operating because of flooding, according to Queensland state premier Anna Bligh. At least 46 mines representing about 80 percent of Australia's total metallurgical coal exports alone have likely been affected by the torrential rains, either directly as rains and flooding slow or halt production or due to rail disruptions, Ben Willacy, an analyst with Wood Mackenzie in Sydney, said. Over one month this would result in 14 million tonnes of lost coal production, Willacy said. Since early December, coal miners, have been invoking force majeure declarations to protect themselves against lawsuits for cancelled export contracts. Still the floods may not have an overall impact on Australia's total coal production this year as long as mining companies can make up for lost time once operations return to normal, according to Willacy. SIGNS OF RECOVERY Macarthur Coal , the worlds largest producer of seaborne low volatile pulverised coal injection coal, has resumed shipments to the port after the key Goonyella rail corridor reopened, but also warned future shipments will depend on the availability of coal. The company said its force majeure declaration on Dec. 3 remained in place due to the heavy rains, which last week swamped the Bowen Basin colliery district and flooded mines. Once the pits are free of water, well have more coal exposed that can be processed and transported, but it is not possible to predict when we will return to a steady state of mining as that largely depends on any future rain, Macarthur managing director Nicole Hollows said. In Australia, like most everywhere in the world, coal is shipped along rail corridors to export ports. Although QR National has re-opened its Goonyella and Moura rail lines, the company said Wednesday that it expected parts of its Blackwater coal rail system to remain flooded for another week. [ID:nL3E7C5026] Last week, Dalrymple, which mostly loads ships bound for Asian steel mills with metallurgical coal, was holding only about 200,000 tonnes of coal against an ideal stockpile of 1.2 million tonnes. The port was now receiving about 230,000 tonnes of coal a day, or some 23 trainloads, slightly below the maximum it can handle, according to the port spokesman. "My concern is that I think we are drawing down from mine stockpiles. Once we exhaust those stockpiles we will get an indication of just how severe the mine production issues are," he said. Two of the largest coal mines, Rio Tinto's Blair Athol mine and Xstrata's Oaky Creek mine, were each holding about 600,000 tonnes of coal in stockpiles, while AngloAmerican's German Creek mine holds about 700,000 tonnes, according to Dalrymple Bay's spokesman. "If we are drawing down 200,000 tonnes-plus per day, it's not going to take long to draw down those stocks," he said. "These mine areas are going to be affected for months to come," said Jess Carey, a flood forecaster for the Australian Bureau of Meteorology. "In terms of river levels, they might recede by next week but these big mining establishments are obviously going to feel the affects for months to come, Carey said." Despite the bad weather, Macarthur said, coal sales for the six months to 31 December 2010 were 2.4 million tonnes, in line with guidance provided to the market in mid-December. But Macarthur also said net profit after tax for the first half of the 2011 financial year would be at the lower end of its Dec. 16 guidance of between A$97 million and A$102 million. Analysts are forecasting spot metallurgical coal prices are set to move sharply higher as Asia's steel mills scour the globe for new suppliers to cover production lost to Australian floods. Spot prices for coking coal are hovering around $250 a tonne, according to coal analysts and traders, more than 10 percent over the industry benchmark of $225 a tonne, free on board, negotiated between BHP Billiton and Japanese steelmakers for the first quarter of 2011. Pressure to find coal elsewhere is now expected to lift spot prices close to $300 a tonne in the next few weeks, a level last seen when Australian collieries flooded in 2008 Australia's 159 million tonnes of coking coal exports -- the majority mined in Queensland -- in 2010 accounted for nearly two thirds of global shipments, according to preliminary government figures. Although the state's coal operations have been heavily impacted, Queensland's nascent coal seam gas industry has been minimally impacted, according to BG Group , Santos and Origin Energy , who all operate coal seam gas wells in the area. (Additional reporting by Amy Pyett; Editing by Ed Davies)

    • About Rebekah

      "Based in Perth, Australia, I cover coal and gas in Asia. Before moving to Perth, I covered oil and fuels like gasoline and diesel in New York City, including the climb of oil prices to a record high near $150 per barrel."
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