Coal deliveries to key Queensland ports stop for days

Coal deliveries to the Queensland ports of Dalrymple Bay Coal Terminal (DBCT), Hay Point and Abbot Point have stopped and may take several days to return to normal.

The disruption came as flooding cut access to key parts of the Central Queensland Coal Network (CQCN). There were moderate flood warnings at 1pm Australian Eastern Time (3am GMT) on 17 January for sites around Mackay.

The city is home to Hay Point, which is operated by Australian-Japanese joint venture BHP Mitsubishi Alliance (BMA), and the multi-user facility at DBCT, with more than 200mm of rain expected to fall on 17 January. Rivers are also flooding across the northern part of the CQCN, although these are largely falling because of drier conditions on 17 January.

Australian iron ore producer BHP — which operates Queensland's largest coal mining business through BMA — has not declared force majeure on 17 January, but could be forced to do so if the flooding affecting deliveries to Hay Point continues for more than a few days. It is the wet season, which often brings flooding, but the levels in Mackay have been compared by locals with those associated with Cyclone Debbie.

Cyclone Debbie — which hit east Australia's Queensland coast in late March 2017 — cut coking coal exports to 3.43mn t in April 2017 from 9.76mn t in March 2017 and 9.65mn t in April 2016, which contributed to a spike in coking coal prices to above $300/t fob Australia. It also forced BHP to declare a force majeure on its coking coal sales from 5 April 2017 to 1 July 2017.

In contrast to Cyclone Debbie, the port of Gladstone and the associated Blackwater rail line on the CQCN are so far unaffected by this latest downpour.

Queensland coal producers Glencore, Anglo American and Peabody all declined to comment on whether the flooding at Mackay and surrounding areas would force them to declare force majeure on deliveries, as they wait to see the extent of the damage.

The Australian Bureau of Meteorology expects the heavy rain around Mackay to ease to showers on 18 January, before clearing to sunshine. But it has also issued a warning that the monsoon is likely to return to far north Queensland over 18-19 January, which could bring further rain to central Queensland later in the week. The monsoon could also increase the chances of tropical cyclones developing in the Coral Sea and a tropical low forming in the Gulf of Carpentaria. Both systems are some distance from the Queensland coal fields and ports, but could lead to further rain and heavy winds if they continue to develop.

By Jo Clarke