under the radar, page-9

Hi Guys,

Article below from the Age re BHP Coking Coal in Queensland.

A question (and I hear what you are saying Gizard that big boys do some silly things at times) but:

Why, as is so clearly shown in the latest WAL announcement that a significant coking coal seam runs through EPC 1067 and given that BMA have an operating pit just to the North and are proposing 2 pits to the South of EPC 1067, have they not already secured this tenement? Especially if they have records of the drilling done in the 1990's.

Gizard's proposition that EPC 1067 could/ probably is worth a lot of money to BMA is logical.

Just doesn't seem logical that it would not be worth BMA's while taking out a small poxy <$30m company in its entirety for that one tenement...??? And if that point holds true, surely they would have done this by now before WAL drill a few holes and then the price of that tenement (through a sale price or the MC of WAL) goes up many-fold ???

Maybe I'm not up to date on the history or something?

Cheers
John

BHP's coal production hit by floods
January 20, 2011 - 4:46PM
Update BHP Billiton has warned the devastating floods in Australia will impact on its coal mining operations for at least another six months, with production already down nearly a third in the last quarter in hardest-hit Queensland.

BHP Billiton, the world's biggest mining company, also posted a 4 per cent rise in quarterly iron ore output to record levels to meet swelling demand from its main customers in China and other parts of Asia.

BHP stock fell 86 cents, or 1.9 per cent, to close at $45.19, outpacing losses in the wider market.

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At its current production rate of 144 million tonnes a year, BHP Billiton would still only produce one-tenth of the consumption of iron ore in China alone.

In a joint venture with Japan's Mitsubishi Development Pty Ltd, BHP Billiton is the world's largest supplier of sea-borne traded hard coking coal, needed to make crude steel.

"Queensland Coal (Australia) production was significantly affected by the persistent rain and flooding that impacted the Bowen Basin during the period," BHP Billiton said, adding output of coal dropped 30 per cent versus the previous quarter.

The statements were the most detailed publicly on the effects of the floods on the company's collieries since the rains started in November, leading BHP and other miners to postpone shipments and make force majeure declarations to break sales contracts.

"Until now there wasn't a peep from BHP about water and flooding and rain or anything in Queensland," said Andrew Harrington, a mining analyst for Patersons Securities in Sydney.

"It's obvious now that this flooding has had an enormous affect on its coal business," Mr Harrington added. "I would expect coking coal prices to go up on this, if only temporarily until the lost production can be made up down the line."

BHP Billiton confirmed that force majeure was declared for the majority of Bowen Basin coal, including at its Goonyella Riverside, Peak Downs, Norwich Park, Gregory Crinum, South Walker and Blackwater operations.

Meteorologists say the rains that devastated huge areas of Australia's eastern seaboard, flooded coalfields and cut off shipment corridors for miners clustered in the inland Bowen Basin were triggered by a La Nina Pacific weather pattern, that only recently peaked and threatens more wild weather.

"When combined with disruption to external infrastructure, we expect an ongoing impact on production, sales and unit costs for the remainder of the 2011 financial year," BHP Billiton said in releasing its fiscal second-quarter production data.

The wet weather has driven long-term pricing for coking coal as high as $US225 per tonne for the first quarter of 2011, and some analysts say that the floods could result in coal prices between $US400 to $US500 per tonne.