BHP, Xstrata, Anglo Coal Operations Hit by South African Rains

By Carli Lourens
Jan. 6 (Bloomberg) -- BHP Billiton Ltd., Xstrata Plc and Anglo American Plc, already facing delays in coal shipments from flooding in Australia, said their South African operations are also being hit by unusually high rainfall.
“Heavy rains over the past few weeks have had an impact on coal production” in South Africa, BHP said in an e-mailed reply to questions today. Preparations before the rainy season have helped to reduce the effect on operations, the company said.
South Africa raised the flood-warning level for its central Orange River area today as water levels in places were expected to reach the highest since 1996. The country’s biggest dam, Gariepdam, is at 113 percent of “full” levels and the second- biggest, Vanderkloof, is 107 percent full, according to figures on the website of the government’s water department.
The national weather service forecast heavy rain, defined as more than 50 millimeters (1.97 inches), in the main coal- producing region of Mpumalanga province in the northeast.
“The recent high level of rain across the country and in particular in the Mpumalanga province have thus far had minimal impact,” Xstrata said in an e-mailed response to queries. “The rains have however had an impact on the poorly maintained roads in the area that could impact some coal logistics.”

Eskom Holdings Ltd., South Africa’s largest electricity supplier, said yesterday that the rains had reduced the amount and quality of coal supplied to four to five of its plants, curbing the company’s ability to generate power. Anglo American, one of Eskom’s largest coal suppliers, said by e-mail its Kriel colliery has been worst affected by the rains.
Opencast Affected
“Opencast mines were affected,” mostly at Kriel, though they are set up to handle heavy downpours, Anglo said.
Eskom Chief Executive Officer Brian Dames told reporters in Johannesburg today that disrupted coal supplies have heightened the risk of power outages in Africa’s biggest economy.
Record rainfall in Australia’s Queensland state has spread flooding over an area the size of France and Germany, disrupting coal mine and rail operations. BHP, Xstrata, Anglo, Rio Tinto Group and Peabody Energy Corp. are among producers to have declared force majeure, a legal measure allowing them to miss contracted shipments due to circumstances beyond their control.
Exxaro Resources Ltd. and Optimum Coal Holdings Ltd. declined to comment on the effect of rains in South Africa.
-Editors: Tony Barrett, Amanda Jordan,
Reporter on this story: Carli Lourens in Johannesburg at clourens@bloomberg.net