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Qld coal productivity to take weeks to recover: QRC  
Lou Caruana
Wednesday, 30 January 2013


QUEENSLAND’S coal export industry may take weeks to return to full production 
in the aftermath of ex-tropical cyclone Oswald’s swathe of destruction, as 
Xstrata Coal calls force majeure on thermal coal shipments out of 
Gladstone.
  
Gladstone in Queensland. “We have declared force majeure on a number of coal 
export vessels from the Port of Gladstone as a result of flood damage to the 
Blackwater rail 
system,” an Xstrata spokesperson told ILN. 

“We are monitoring the situation and are in close contact with Aurizon, the 
network operator.”

Queensland Resources Council chief executive Michael Roche said the 
damage to infrastructure and the disruption to shifts from workers being
 cut off from transport would impact on the industry’s ability to 
operate at peak performance. 

“We are receiving reports of significant damage to the Blackwater and 
Moura rail systems that carry coal from the southern and central Bowen 
Basin to the Port of Gladstone, where operations have also been hampered
 by around 800mm of rain,” he said.

“While the situation is still being assessed by network operator 
Aurizon, these rail lines to Gladstone could be out of action for up to 
seven to 10 days.”

Roche said that despite falls of 200-400mm in the northern Bowen Basin, 
mines were generally into recovery mode with continuing access to the 
rail systems serving the Abbot Point and Port of Hay Point export 
terminals.

“This recovery process will take several days and will result in some 
loss of coal production but that is not unusual in the Queensland wet 
season,” he said.

“Coal production was also hampered throughout the state by road closures
 preventing employees getting to and from work and also by the need for 
some employees to stay with their families in flood-affected 
communities.

“By and large normal operations are resuming today [Tuesday] but as 
always, the resumption of normal production will be determined by the 
safe operation of the mines.”

Roche said it did not appear the coal industry suffered as much damage 
as in the 2010-11 floods but it was also clear that the legacy water 
issue from that time had not been eased because of the extreme rainfall 
recorded over recent days.

All of the coal companies in Queensland are accustomed to dealing with 
tropical weather and after the 2010-11 floods had reinforced their flood
 defences, according to a research note by Paterson Securities.

The 2010-11 floods knocked out the mining and transportation of coal for a 
rolling period of about three months. 

“However, with the price of coking coal already rising over the past two
 months, this added concern about supply disruptions is likely to see 
the price rises continue past $170 a tonne,” Patersons said.

It said in terms of companies impacted, the candidates to watch were New Hope 
Coal and Tiaro Coal Mines.

“NHC has all of its current operations in the Surat and West Moreton which use 
the western line,” Patersons said. 

“Its operations near Ipswich are likely going to be disrupted due to the
 local flooding as well as the closure of the western line. 

“Bundaberg is subject to major flooding and TCM has its exploration and 
development activities in the region to the south of Bundaberg and may 
suffer from the regional flooding – likely delays in access and 
drilling.”

Roche rejected claims by some anti-coal activists that approved mine water 
discharges could be adding to flooding downstream.

“The amount of water being discharged by coal mines in the Fitzroy Basin
 is like adding a thimbleful of water to an Olympic swimming pool,” he 
said.
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