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Australian coal miners face more flood forecasts

Sydney, 7 September (Argus) - Australia's coal miners are bracing for more floods during the next wet season, after the government's weather forecaster said there was an increased probability of another wet Christmas.

Severe rain in Queensland last December and January flooded much of the state's coal mines and associated rail infrastructure, with some mines still containing water eight months later. This pushed up coal prices significantly as global supply failed to keep pace with demand.

The heavy rainfall was associated with the La Nina weather pattern and the Australian Bureau of Meteorology last week said there is now an increased chance of a second La Nina developing this year. "It's worth noting that since 1900, about half of all La Nina events re-emerged in the second year."

There are no signs that this La Nina will be as strong or catastrophic as last year, but, with many mines still holding water, even moderate flooding could have a big impact on production.

Australia shipped 12.35mn t less thermal coal in the first six months of this year than in the same period last year, when it should have been increasing exports as new mine and infrastructure capacity came on stream. July and August were also down by around 20pc on year earlier judging by early figures from export ports.

Thermal coal exports out of Australia are operating at an annualised rate of 160mn t/yr with coking coal exports at around 145mn t/yr, compared with coal export port capacity of 400mn t/yr.