A coal seam collapse at the Moranbah North coking coal mine in Australia's Queensland during a planned longwall change yesterday threatens to disrupt supplies to steel producers.
Geological conditions at the Moranbah North mine have long proved to be challenging, with the coal seam that collapsed during the longwall change damaging some longwall equipment, a market participant said.
Mine operator UK-South African mining firm Anglo American confirmed the incident but did not provide additional details.
The Moranbah North mine has been hampered by similar production issues in the past, a Japanese trader said. "The mine does not have a strong seam and cavity issues have caused ceiling collapses there before."
The delay in resuming production at Moranbah North is made even more complicated by customers previously affected by production disruptions at Anglo American's German Creek mine having agreed to take substitute Moranbah North cargoes.
Most of the vessels currently waiting to load cargoes at the Dalrymple Bay Coal Terminal are waiting for their stocks of Moranbah North, said Australian market participants . The latest incident might further exacerbate the vessel queue situation.
An Indian buyer in the market for a March-loading premium mid-volatile cargo was expecting prices to trend down from the disruptions to Chinese steel production amid the country's coronavirus outbreak.
But a major delay to production resuming at Moranbah North could tip the balance back towards a shortage in the spot market and push prices higher, the buyer said.
Others were more restrained in their assessment. "We heard that the longwall panel change at Moranbah North has resulted in production issues. But no disruption on short-term supply is expected as the producer likely has stocked up volumes for a month or so," another Japanese trader said. "It is still too early to assess the market impact now."
The Moranbah North mine produced 6.15mn t of coking coal in 2019, down by 9pc from 6.76mn t in 2018.
