Cline Mining Corporation T.CMK

possibly way more than 18 million tons lost

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Coal production grinds to a halt because of Queensland floods
Sarah-Jane Tasker and Michael Sainsbury 
From:The Australian 
January 12, 201112:00AM
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COALMINES and rail infrastructure in Queensland continue to shut down as the flooding worsens, prompting US producers to fill the vacuum.


New Hope Corporation is the latest miner to announce it has suspended coal production after its thermal coalmines in southeast Queensland were affected by the adverse weather.
"Over the past 48 hours very substantial rainfall has occurred in southeast Queensland," the company said. "Production activities at all New Hope operations has been suspended."
The continued heavy rainfall has affected the entire coal chain.
QR National announced yesterday that it had stopped rail services to mines west of Brisbane because of the flooding and the closure of the rail line on the Toowoomba Range after a landslide on Monday night.
"The network operator, Queensland Rail, has advised that it had been unable to assess the extent of damage to the railway caused by the landslide on the range. However, early indications are that the impact may be significant," QR National said.

Related Coverage
Floods keep exports in limbo Herald Sun, 13 hours ago

Floods cost economy billions Adelaide Now, 17 hours ago

Floods force another coal mine closure The Australian, 1 day ago

Flood cost put at $6bn, and rising Perth Now, 1 day ago

Waiting coal ships costing $1.37m a day Courier Mail,1 day ago











Any significant damage to railway lines would delay the return to normal production for the waterlogged sector, keeping prices high and exacerbating already rising inflation in China and other parts of Asia.
"While there has been significant damage to some coalmines in Queensland, we believe the rail infrastructure will be the bottleneck over the coming months," Citi resources analysts Daniel Hynes and Alan Heap said.
"We are hearing reports that there has been structural damage to several bridges on the Blackwater line. If that is the case, export tonnage will be severely impacted for some time as inventories were already low after lingering rains in early December disrupted coal loadings."
QR National's Blackwater line has a capacity of 66 million tonnes of coal each year.
Citi estimates up to 5 million tonnes of coking coal have already been affected and that the market will lose at least 10 million tonnes from the closure of the Blackwater system alone. This represents more than 4 per cent of 2010 global exports.
The analysts said they might have to raise their initial forecasts of 18 million tonnes of coal lost or delayed due to flooding.
The floods have forced the world's largest miners to declare force majeure on their contracts. BHP Billiton, Rio Tinto, Xstrata, Peabody Coal, Wesfarmers, Macarthur Coal, Anglo American and Cockatoo Coal have all lost production and US coal companies are reportedly rushing to fill the supply vacuum.
Miners, particularly in Central Appalachia, are fielding inquiries from overseas buyers.
"It puts us in a terrific position," Ted Pile, a vice-president at Abingdon-based Alpha Natural Resources, told The Wall Street Journal.

"Buyers are becoming more flexible on their coal specifications, knowing that much of the high-quality, hard-coking coal is tied up or under water."