Rio and Aquila resume operations after Queensland floods

Saturday, 22 Jan 2011
Reuters reported that miners Rio Tinto and Aquila Resources have resumed some operations in Australia's flood ravaged Queensland state as waters receded and the region's vital mining and metals sector slowly returned to work.
Rio Tinto terminated force majeure at its Boyne Island aluminium smelter as it could resume transportation while Aquila restarted production at its Isaac Plains coal mine, a joint venture with Brazil's Vale.
But Queensland's coal industry, which suffered losses of over USD 2 billion according to some estimates, is still far from normal and Aquila warned it would still take some time to resume full operations while Cockatoo Coal said mining at its Baralaba operations would not start before February 2011.
Aquila said that "Whilst all equipment is in working order, resumption of full production rates will take some time while dewatering of the site is completed. Force Majeure remains in place on a number of sales contracts."
Australia accounts for around two-thirds of the world's coking coal exports and Queensland share is around 90 percent of that figures.
Gladstone Port, Queensland's second largest coal export port, earlier this week said it would take until the end of March 2011 for exports to return to normal while mining services companies said it could take three to six months to pump out all the water in mining pits.
(Sourced from www.reuters.com)

Analysts see coking coal shortages

Monday, 17 Jan 2011

Bloomberg reported that several analysts’ sees floods in Australia disrupting coking coal supplies and boosting steel making costs.
RBS Equities analyst Mr Rahul Jain without giving estimates said that stoppages in coal shipments from Queensland State under force majeure clauses are likely to create a shortage in the April to June quarter, forcing steelmakers to lower production.
Mr Rakesh Arora an analyst at Macquarie Group Ltd in Mumbai said that steelmakers may also raise prices to cover cost increases.
Mr Giriraj Daga an analyst at Nirmal Bang Securities Ltd in Mumbai said that the worst floods in 50 years in Australia’s largest coal exporting region is creating a raw material shortage in India, where steel demand is forecast to grow 10% in the year to March 31. Profit margins at Indian steelmakers may shrink more than 10% next quarter because of an increase in fuel costs.
Mr Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd in Melbourne said that Queensland, which accounts for about 20% of Australia’s AUD 1.3 trillion economy is losing AUD 480 million a week in coal exports
According to Mr Petersfield Englandbased researcher IHS McCloskey, Australian coking coal rose to USD 265 a tonne on average last week from USD 248.
Sourced from Bloomberg