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Floods in eastern Australia hit coal mining operations, supply chains


Glencore cuts capacity at some sites, rail movement disrupted

Yancoal suspends production at two open-cut mines

Hunter Valley rail lines shut as ARTC ceases some operations

  • Author
  • Nathan Richardson and Eric Yep
  • Editor
  • Kshitiz Goliya
  • Commodity
  • Coal Shipping

Sydney — Floods in eastern Australia, affecting the states of New South Wales and Queensland, have impacted operations at coal mines in the region, stalled railway transportation, affected port schedules and disrupted supply chains in general, mainly for thermal coal exports.

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With weather conditions getting worse, companies and government officials were still assessing the impact, but market participants expect more rail and port infrastructure to be affected in coming days.

Miner Glencore said in a statement March 23 about its coal operations that it had taken "precautionary measures, including the decision to operate at reduced capacity at some sites" and that train movements to the Port of Newcastle had been delayed due to flooding on some parts of the track.

'We continue to monitor the current weather events across NSW and have robust infrastructure installed at each of our sites to minimize impacts," Glencore said, adding that it was business as usual at its Queensland coal operations.

Glencore is one of Australia's largest coal producers with a mixture of open cut and underground coal mines across New South Wales and Queensland.

Another major coal producer Yancoal Australia Ltd said March 23 that heavy rainfall since March 19 had caused the suspension of production at two of Yancoal's open-cut mines in the Hunter Valley region, mainly the Mount Thorley Warkworth as well as the Stratford and Duralie mines.

"There have also been interruptions to rail transportation and port operations. Given the rain event is anticipated to continue over the coming days, it is too early to provide an accurate indication of the extent of these production interruptions," Yancoal said in a statement.

However, Yancoal said its mines in regions outside the Hunter Valley, such as Moolarben in the Central West of NSW and Queensland operations, have not been impacted by the rains.

Ports and Railways

Rail and port infrastructure have also been disrupted.

The Australian Rail Track Corp temporarily ceased operations through the Hunter Valley network between Newcastle and Maitland and the Interstate Network between Telarah and Grafton due to localized flooding, it said in a statement.

"This was done as a precautionary measure, following extreme weather conditions across the region," it said, adding that "high rainfall, potential for more severe flooding beyond the current impacts to the network, strong winds, fallen trees and debris, power failures and fallen power lines and power poles are all concerns which led to operations being halted."

"When it is safe to do so, we will begin the process of reopening the tracks by undertaking a full assessment of rail operations however this will not be until conditions are safe and water levels recede," ARTC said, adding that it would provide further updates as the situation progresses."

Australian rail freight operator Aurizon said there was no impact on its operations in Queensland.

The Port of Newcastle said it was monitoring conditions and scheduling vessels in close communication with Port Authority of NSW, and that each vessel is assessed on a case-by-case basis for its suitability at the time of each scheduled movement.

"The shipping schedule is adapted relative to the weather conditions and safety assessments. This type of temporary weather event does not typically have any lasting impact. The port continues to operate and is monitoring conditions closely," it said in a statement March 23.

There were 11 ship movements on March 22, compared with an average of 12 on a normal day, and there have been some schedule changes where conditions restricted the pilotage of vessels, but the port said it continued to operate.

The three coal terminals comprise two at Port Waratah Coal Services, Carrington Coal Terminal with a capacity of 25 million mt/year and Kooragang Coal Terminal with a capacity of 120 million mt/year, and one at Newcastle Coal Infrastructure Group. The port has 20 berths of which eight are for coal.

Australian coal miner Whitehaven narrowed its fiscal year 2020-21 (July-June) run-of-mine coal production from 21 million mt-22.5 million mt to 21.4 million mt-22 million mt because of port issues and flooding, the company said March 23.

The miner said it made the decision following Newcastle Coal Infrastructure Group suspending shiploading at the Port of Newcastle for two weeks for repair work.

An assessment of its shiploader SL1 found faults requiring an expected two weeks of repair work. It's other shiploader SL2 suffered storm-related damage in November and isn't expected back online until October-December, Whitehaven said.

Whitehaven said flooding in New South Wales had elevated the possibility of disruptions to the coal chain.

Meanwhile, shipbrokers said that the number of vessels due to load coal had grown around port limits, and operations at ports further out like Port Waratah and Port Kembla could also be impacted if the flooding continues.