Have a read of the article below, mainly to do with coking coal but also talks about the bowen basin region. Have also attached a few links to other coal articles.
Floods to impact coal markets for months David Fickling From: Dow Jones Newswires January 06, 2011 4:31PM Increase
The impact on coal markets from the Queensland floods could go on for months as weather patterns hamper efforts to restore output to mines. Existing stockpiles of coal could run down within weeks as miners struggle to meet contracts, while mine pits may remain flooded for months, putting upwards pressure on the price of the coal used in steelmaking at a time when global economic indicators are showing signs of recovering industrial production.
In Moranbah, a tidy company town of around 10,000 people at the heart of the Bowen Basin coal producing region, December rainfall was the highest in nearly 30 years of records, with 350 millimeters falling during the month against an average level of 102mm.Around a third of the 172 million tonne-per-year seaborne market in hard coking coal is mined from the Collinsville Shelf, a single 250km geological formation stretching to the north and south of Moranbah. All 18 mines on the seam have been hit to differing degrees, say mining companies and local contractors.
BHP Billiton, Xstrata, Rio Tinto, Anglo American and Peabody Energy have all declared force majeure on their production from the region over the past month, and analysts and local contractors believe the impact could last months in spite of clearing weather conditions in recent days.At Goonyella Riverside, the region's biggest coal mine with 14 million tonnes a year of production, the BHP Billiton-Mitsubishi Corp. joint venture, which operates the site, refused to give details on the impact to production from the rainfall.
In common with the region's other major miners, BHP is still assessing the impact of the rains on its production and refused to give any details beyond published regulatory statements.But coal conveyors and mining machinery visible from the Goonyella Riverside's perimeter road were at a standstill despite an expected price spike that should be driving coking coal miners to operate close to full capacity.Disruption from the rainfall could drive prices of spot hard coking coal up to $US350 a tonne from current levels of around $US250 a tonne, Commonwealth Bank of Australia said in a report today.
The premium hard coking coal mined on the Collinsville Shelf is usually supplemented in steel mills with lower-grade coals but at least some hard coking coal needs to be burnt for every tonne of steel produced in blast furnaces. Floods are now mostly receding from this northern part of the Bowen Basin, giving miners an opportunity to release existing stocks, although a spokesperson for Peabody Energy said access to local mine sites was still seriously restricted, with some bridges damaged by raging floodwaters.
Seamus French, chief executive of Anglo American's coal unit in Australia, said clearing water from flooded pits could take "some weeks"."Transport infrastructure capacity and availability is uncertain and likely to remain so with more rain forecast, making it too early to tell when our operations will recommence," he said.But coal coming to port could drop off further in coming days. Andrew Garratt, a spokesman for Dalrymple Bay Coal Terminal, the world's third-busiest coal port, said that 20 trains a day were currently coming into the terminal, which is operating at around two-thirds of full capacity as a result.
That was expected to fall over the coming days as stockpiles at mines are exhausted, leaving new supplies dependent on production that has been halted by the wet weather.Energy consultants Wood Mackenzie warned today that mine stockpiles, which are currently providing the bulk of export coal in the absence of new mine production, were likely to be exhausted during the second week of January."If operators cannot restart production by this point, the impact of the flooding on revenue will be greatly amplified," Analyst Ben Willacy said. Goonyella Riverside's main stockpile - a black escarpment tens of meters high visible from the site's office - still appears well-supplied.
The Goonyella train network supplying Dalrymple Bay may also take on additional tonnage from mines further south in the Bowen, Mr Garratt said, where the Blackwater rail network has been submerged in some areas and could require time-consuming repairs.At Mine Assist, a mine services company specialising in installing pipelines to remove water from flooded mine sites, supervisor Danny Paddison said his team had been working 12-hour days, seven days a week, to help clear out flooded sites.
"We've been flat out. Until they clear the water out of the pits, they can't get their shovels down to start mining," he said. Mine pits can take 3-6 months to drain, suggesting that the effect of the recent rains could be long lasting.Many miners have been paradoxically hoping for more rainfall, Mr Paddison said. Further rains will swell local creek waters, giving mine operators a chance to discharge water from their open pits without breaching environmental water quality regulations.
In all, 11 mines and two coal-seam gas operations have released unauthorised water since November 30, according to Queensland's Department Of Environment and Resource Management.However, too much rain risks compounding the problem and rainfall on coal stockpiles threatens to degrade the quality of the coal by increasing its moisture content, a major factor in coal pricing.
