Queensland Cuts Coal Output Forecast 10.5% on Floods

By Ben Sharples - Jan 19, 2011
Queensland cut its annual steelmaking coal output forecast by 10.5 percent and expects resumption of normal mining to take as long three months after record rain in Australia, the biggest exporter of the fuel.
Coking coal output in the 12 months ended June 30 is forecast to be 177.3 million metric tons, down from an initial projection of 198 million tons, Mines and Energy minister Stephen Robertson said in a telephone interview. This compares with 182.1 million in the 12 months ended June 30, 2010.
“Queensland is the world’s largest exporter of seaborne coal, so when our supply chains get interrupted that’s felt by a large part of the world,” Robertson said. “We’ve experienced the largest natural disaster in our history, with flooding that has enveloped almost three-quarters” of the state, he said.
The worst flooding in 50 years may have cost A$2.3 billion ($2.31 billion) in lost coal sales, the Queensland Resources Council estimates, with only 15 percent of the state’s mines operating at full production. It may take between two-to-three months for normal operations to resume, Robertson said.
BHP Billiton Ltd. and Xstrata Plc are among producers who’ve said they may miss deliveries. Force majeure remains in place at four mines operated by Rio Tinto Group, the company said yesterday in its fourth quarter operations report.
Australian hard prime coking coal used by steelmakers sold for $280 a metric ton on average last week, up from $265 the week before, according to IHS McCloskey. Prices may reach $300 a ton this year, McCloskey said Jan. 17. Source : Bloomberg