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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)

Jan 4, 2011

Steel mills face higher costs after Australia coal mines flood

SYDNEY (Reuters) – Spot coking coal prices have risen around 10 percent in a month and look set to move sharply higher as Asia’s steel mills scour the globe for new suppliers to cover production lost to Australian floods.

More than two months of torrential rains in Australia’s Queensland state, the world’s largest exporter of coal for steel-making, have left collieries underwater, rail lines inoperable and coal ports running at a trickle — if at all.

Jan 4, 2011

Analysis: Steel mills face higher costs after Australia floods

SYDNEY (Reuters) – Spot coking coal prices have risen around 10 percent in a month and look set to move sharply higher as Asia’s steel mills scour the globe for new suppliers to cover production lost to Australian floods.

More than two months of torrential rains in Australia’s Queensland state, the world’s largest exporter of coal for steel-making, have left collieries underwater, rail lines inoperable and coal ports running at a trickle — if at all.

Jan 4, 2011

Analysis – Steel mills face higher costs after Australia coal

SYDNEY (Reuters) – Spot coking coal prices have risen around 10 percent in a month and look set to move sharply higher as Asia’s steel mills scour the globe for new suppliers to cover production lost to Australian floods.

More than two months of torrential rains in Australia’s Queensland state, the world’s largest exporter of coal for steel-making, have left collieries underwater, rail lines inoperable and coal ports running at a trickle — if at all.

Dec 31, 2010

Rains halt coal supply to Australia’s Gladstone export

PERTH (Reuters) – Torrential rains and flooding are set to cut rail supplies of coal for another week from inland mines to Australia’s third-largest coal export terminal Gladstone, forcing the port to run down already-depleted inventories.

“With the coal supply chain stopped due to the extensive flooding in the area, we are only able to load from our stockpiles,” Gladstone Port Corp Chief Executive Craig Walker said in a statement.

Dec 31, 2010

Rains halt coal supply to Australia’s Gladstone export terminal

PERTH, Dec 31 (Reuters) – Torrential rains and flooding
are set to cut rail supplies of coal for another week from
inland mines to Australia’s third-largest coal export terminal
Gladstone, forcing the port to run down already-depleted
inventories.

“With the coal supply chain stopped due to the extensive
flooding in the area, we are only able to load from our
stockpiles,” Gladstone Port Corp Chief Executive Craig Walker
said in a statement.

Dec 30, 2010

Anglo American declares force majeure on Australia

PERTH (Reuters) – Global miner Anglo American (AAL.L: Quote, Profile, Research) has declared force majeure on its coal mines in Australia’s Queensland state due to prolonged heavy rains, joining a long list of coal firms hit by weather-related problems.

“Adverse impacts due to flooding vary across our operations and include disruption to road access, production and rail transportation,” the company said on Thursday.

Dec 30, 2010

Anglo American declares force majeure on Australia coal mines

PERTH, Dec 30 (Reuters) – Global miner Anglo American
has declared force majeure on its coal mines in
Australia’s Queensland state due to prolonged heavy rains,
joining a long list of coal firms hit by weather-related
problems.

“Adverse impacts due to flooding vary across our
operations and include disruption to road access, production
and rail transportation,” the company said on Thursday.

Dec 29, 2010

Australia coal port, freight operations disrupted

PERTH, Dec 29 (Reuters) – Heavy rains and flooding in
Australia’s key coal-producing Queensland state have brought
parts of the coal infrastructure, including rail and ports, to
a standstill, operators said on Wednesday.

Dalrymple Bay Coal terminal and Gladstone Ports, two of
Australia’s biggest coal terminals, and rail firm QR National
, the nation’s top coal transporter, said they were
forced to cut back operations due to weather-related
disruptions.

    • 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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