[miningmx.com] — AUSTRALIA’s flood-stricken coal industry was facing lengthy disruptions on Thursday, with one miner saying it could take weeks to drain its pits of water and the biggest coking coal port warning there was a risk its stocks could run out.
Floods swamped coking coal mines in Queensland state in December, paralysing operations that produce 35% of Australia’s estimated 259 million tonnes of exportable coal. Australia accounts for two-thirds of global coking coal exports, which are needed to make steel.
About 200,000 people scattered across an area the size of France and Germany combined have been affected by the flooding in Queensland. Damage from the floods, the worst in the state in 50 years, has been estimated at $5bn.
London-listed Anglo American , one of the nation’s top four miners of steel-making coal, said it was preparing to pump water out of its flooded mines but that it was too early to say when its collieries could resume operation.
“Our focus is currently on mobilising our people and other resources and de-watering flooded coal pits, which we estimate will take some weeks,” Seamus French, head of the group’s metallurgical coal division, said in a statement.
Anglo has about seven coal mines in Queensland, which accounts for most of Australia’s coking-coal exports.
Anglo’s major rivals, Rio Tinto , Xstrata and BHP Billiton , have also been hit by the floods, and all have made force majeure declarations, which companies can evoke to temporarily release them from delivery obligations.
The flooding is already receding in some coal fields, but all four major producers still face supply disruptions and cannot say when operations would return to normal.
“It’s impossible to say at present (how long coal operations will be down). If there are no further weather events, things could be back to normal within a month, however we are only at the start of the wet season,” Colin Hamilton of Macquarie Commodities Research in London told Reuters in an email.
In 2008, flooding kept some mines out of action for as much as six months, but others were able to start producing within four to six weeks, said Andrew Harrington, an analyst at Patersons Securities in Sydney.
Mines then turned up output to recoup losses and ended the year about 10% below where they otherwise would have been.
“This time around, it’s happening a lot earlier, it looks a lot worse, and we’re still seeing more rainfall,” said Harrington.
CAMELS, HORSES AND SNAKES
Floodwaters have begun to slowly recede in some districts in Queensland, but were still rising in some areas further south, including around the town of St George.
In Rockhampton, a cattle town of 75,000, muddy flood waters had dropped a few inches overnight despite more heavy rains but it will take days before a cleanup can begin. On pockets of higher land, camels and horses grazed on people’s front lawns, while residents relied on boats to fetch supplies.
The majority of homes are built on stilts in the flood-prone area, so water had not entered living spaces in most cases and generators were providing power.
Hospitals in central Queensland have also been stockpiling anti-venom, media reported, after snakes sought refuge in homes, including the deadly brown snake.
ECONOMIC COST PUT AT $5BN
Three people have been killed in the floods and hundreds left homeless. The economic cost of the inundation, which some scientists are linking to global warming and rising sea temperatures, is already estimated at around $5bn.
Roads, rail lines and bridges have been submerged, and authorities are waiting for the waters to recede before they can assess how much vital infrastructure needs rebuilding.
Australian stocks were flat on Thursday, undermined in part by worries about the impact of flooding on mining profits.
Dalrymple Bay Coal Terminal, in the country’s largest coal export port, was getting coal from inland mines on Thursday, but warned future deliveries could dry up unless mines started reopening by the weekend.
“If there is an issue with mine production and we are drawing down our stockpiles, it’s only a matter of time before we exhaust those,” said Dalrymple spokesman Greg Smith.
“It will be Friday or so before we would start to get an indication — if the trains we send up to mines are cancelled,” he added. Typically the port receives about 230,000 tonnes to 240,000 tonnes of coal daily from mines.
“If we can’t get it in, we can’t ship it out.”
QR National, the country’s biggest coal freight business, said on Thursday it was ramping up operations on a reopened rail line, enabling more coal to reach the coast, but problems remained elsewhere on its flood-hit network.
A QR National spokesperson said more tonnage was reaching Gladstone port on its Moura line, which services Anglo-American’s Callide and Dawson mines as well as Cockatoo Coal’s Baralaba operation.
But QR National’s Blackwater line remained closed, impacting operations for Wesfarmers, BHP Billiton, Xstrata and Rio Tinto.
“The Blackwater coal system remains closed and we are currently waiting for the flood waters to recede. That’s expected to go well into next week,” the spokesperson said.
