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Australia coal disruptions worsen after cyclone: Update

30 Mar 2017 18:08 (+01:00 GMT)
Australia coal disruptions worsen after cyclone: Update

Adds latest changes in the weather situation

Sydney, 30 March (Argus) — Queensland's coal supply chain has been severely disrupted by flooding caused by heavy rainfall and winds, which has led at least one producer to declare force majeure.

The weather conditions have since eased as ex-tropical cyclone Debbie moves south and this has allowed port operator Gladstone Ports to restart ship loading at the RG Tanna Coal Terminal, following an inspection by government agency Marine Safety Queensland. The Port of Gladstone is expected to allow coal vessels to depart.

But all four of rail operator Aurizon's coal rail systems — Newlands, Goonyella, Blackwater and Moura — on the central Queensland coal network remained closed as a result of localised flooding, the firm said today.

Aurizon expects to start aerial inspections of the Goonyella and Newlands corridor today, weather permitting. "This will provide an initial assessment of any damage or flooding on the rail corridor and allow Aurizon to plan any recovery work that is required," it said.

Rainfall was largely confined to the southeast coast of Queensland and the Darling Downs area, where parts of the state capital had up to 200mm of rain in the past 24 hours, Australia's Bureau of Meteorology said.

Queensland exported around 220mn t of coal last year, or around 600,000 t/d, of which around two-thirds was coking coal and the rest thermal coal.

Heavy rain has extended south into neighbouring New South Wales (NSW), just north of the Hunter Valley region where most of Australia's thermal coal is produced.

Adverse weather has forced the 17mn t/yr Port Kembla coal terminal south of Sydney in NSW to ask vessels to moor 12 nautical miles (22km) offshore, rather than inside the port.

Coal output suspended

Coal production remained suspended at most of the mines in the world's largest coking coal exporting operations. The weather has disrupted operations at the Goonyella-Riverside, Peak Downs and Daunia mines, which are part of the BHP Mitsubishi Alliance (BMA) coking coal venture between UK-Australian resources group BHP Billiton and Japanese trading firm Mitsubishi.

BMA accounts for about a quarter of global metallurgical coal trade, which is forecast to be about 315mn t this year.

The 55mn t/yr Hay Point coal terminal operated by BMA remained off line today, BHP Billiton said.

The South Walker Creek and Poitrel mines run by the firm's BHP Billiton Mitsui Coal (BMC) joint venture with Japan's Mitsui were suspended. Chinese-owned producer Yancoal confirmed yesterday that a force majeure has been declared at its 5.3mn t/yr Middlemount coking coal and PCI mine in the Bowen basin.

Cyclone Debbie is the largest cyclone to hit the east coast of Australia since cyclone Yasi in 2011. It has occurred towards the end of the current cyclone season in April. The Bureau of Meteorology issued a separate report today on Australia's weather outlook for the April-June period, warning that wet conditions may continue in eastern Australia in the period, but rainfall for most of the rest of the country will be below average.