The Australian Bureau of Meteorology (BoM) has called the end of the La Nina weather trend that brings above average rainfall to the east coast of Australia but raised the prospects of dry weather associated with an El Nino pattern.
The 2022-23 La Nina was the third in a row, with the above average rainfall on already saturated ground leading to major floods, full water storage capacity and inundation of mining, drilling and infrastructure sites. This contributed to supply constraints in Australian seaborne coal and coal-bed methane (CBM) gas used in LNG exports. But the La Nina contributed to drier conditions in Western Australia (WA) and a more calm wet season in the iron ore-producing Pilbara region.
An El Nino weather pattern is associated with low rainfall and sometimes drought in east Australia but higher rainfall in WA. The system is currently neutral but the BoM forecasts a 50pc chance of an El Nino developing in 2023. The last El Nino was in 2015-16 and contributed to the drought that continued on the east coast until 2019 ahead of the first of this latest run of three La Ninas from 2020-21. A one-year turnaround from La Nina to El Nino last occurred in 2009.
Drier weather would be good news for coal mining and CBM firms in drying out water from wet pits and operations on the east coast. But a sudden change to hot dry conditions could increase the chance of bush fires, with the wet weather of the past three years leading to major plant and tree regrowth and limited fire mitigation work. Bush fires can damage mine, well and rail infrastructure, as well as make it dangerous for employees to get to or be at work.
An El Nino could lead to much heavier rainfall in the Pilbara that could disrupt iron ore mining, rail and port operations.
Last month, before the La Nina had officially ended, the BoM forecast a 60-80pc chance of below median rainfall in most of Australia during March-May.
