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Rain, floods disrupt Queensland's coal

disclaimer: image is for illustration purposes only
by Staff Writers
Brisbane, Australia (UPI) Dec 30, 2010
Torrential rain and flooding have nearly brought the coal industry in the Australian state of Queensland to a standstill.

Queensland, on the east coast of Australia, accounts for about two-thirds of the world's supply of coking coal, a vital ingredient in steel making. Its state capital, Brisbane, has recorded its wettest December in more than 150 years.

The deluge of rain disrupted production at four of Rio Tinto's coal mines in Queensland, forcing the world's third largest mining company on Wednesday to declare force majeure on coal exports, a clause that allows it to miss contracted deliveries because of conditions beyond the company's control.

Miners Xstrata, Vale and Macarthur Coal have made the same declaration, as did miner Anglo American on Thursday.

As a result, coal mines with an annual production capacity of at least 80 million tons -- about 30 percent of Australia's coal exports last year -- are now under force majeure, the Guardian newspaper reports.

Rio explained that the downpours from "severe monsoonal rain" had cut access roads and rail networks, with an "adverse impact on mining operations," the Financial Times reports.

"While all efforts are being made to minimize the impact of this adverse weather on coal production, our primary focus is on the safety and well-being of our employees and their families," the company said.

Michael Roche, chief executive of the Queensland Resources Council, said in a statement that mining industry staff are working around the clock in very difficult conditions to manage huge quantities of water that have inundated mines, especially in central Queensland's Bowen Basin.

Export earnings would be severely affected, Roche told the Australian Broadcasting Corp.

"It's clearly tens of millions of dollars of lost production," he said. "(It's) very hard to play catch up at the moment because there has been so much wet weather constantly, and it has not been possible for many mines to build up stockpiles to deal with this sort of weather."

QR National, Australia's largest coal rail freight company, said it expected deliveries would be "adversely" affected following an accident on one of its lines in Queensland.

"Disruptions have been compounded by the derailment of a train on December 24 near Mackay, which resulted in the temporary closure of the Goonyella coal haulage system," QR said in a statement Wednesday. "Repair crews are working to resume coal services there within the next few days."

Typically, the artery carries 40 trains and coal worth more than $100 million each day.

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