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Storm halts more coal operations in Australia's Bowen Basin

Sydney — Operations in Australia's major coal producing region, the Bowen Basin in Queensland, are under threat as Tropical Cyclone Debbie barrels towards the coast. It is expected to make landfall later Tuesday.

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Rail operations have been suspended in the region, operator Aurizon confirmed Tuesday, after key coal ports halted operations. Some mines are also being shut.

"Yesterday, Aurizon closed facilities from Mackay to Townsville and requested employees to safely return to their homes as Tropical Cyclone Debbie approaches the Queensland coast," Aurizon said.

"Following port closures, the unloading of coal trains has ceased at the Abbot Point Coal Terminal near Bowen, and the Dalrymple Bay Coal Terminal and Hay Point Coal Terminal, south of Mackay," it added.



Coal trains in the Goonyella and Newlands systems have been stowed in preparation for the cyclone, Aurizon said.

The Goonyella coal rail system services mines in the Bowen Basin and connects to Hay Point and Dalrymple Bay. The Newlands rail system also services the Bowen Basin, and connects mines to the Abbot Port Coal Terminal.

The Hay Point, Dalrymple Bay and Abbot Point terminals exported a combined total of 11.4 million mt of coal in February and 144.19 million mt in 2016, data from North Queensland Bulk Ports shows.

Coal train services in the Blackwater and Moura Coal systems into the port of Gladstone continued to operate, it said. Gladstone is further south on the Queensland coast.

The Dalrymple Bay, Hay Point and Abbot Point coal terminals have already suspended operations in recent days in preparation for the cyclone, S&P Global Platts reported Monday.


MINES TO SHUT


Glencore plans to halt output at some mines due to the storm, a spokesman said Monday.

"We are preparing to temporarily suspend production at our Collinsville and Newlands coal mines," the source said, adding that the company did not expect this to affect its annual production forecasts.

"It remains business as usual at our Oaky Creek, Clermont and Rolleston coal mines," he said.

All the mines mentioned by Glencore are in the Bowen Basin. The Collinsville and Newlands mines are further north. Collinsville has a 6 million mt/year mine capacity and Newlands 11 million mt/year. Both mines produce thermal and metallurgical coal and export through the Abbot Point Coal Terminal.

The Commonwealth Bank of Australia said in a research note late Monday that the Bowen Basin seemed most vulnerable to flooding.

"The basin accounts for nearly 60% of global seaborne coking coal and exports and [roughly] 6% of global seaborne thermal coal exports," it said.

"If the cyclone damage is limited to the railways and ports only, we expect the disruption to supply to be limited. However, the delays could be longer if the coal mines are flooded."

The cyclone is classified as a category 4 storm and is expected to remain at that level when it crosses the coast. It is expected to make landfall between Ayr and Midge Point at around midday local time Tuesday, Australia's Bureau of Meteorology said.

A category 4 system is defined as one that has sustained winds in the range of 160-200 kmh, with gusts up to 280 kmh. Category 5 is the highest on BOM's scale.

Tropical Cyclone Debbie has the potential for a lot of damage. BOM's Queensland Regional Director Bruce Gunn said over the weekend that it was of a size not seen in Queensland since Severe Tropical Cyclone Yasi in 2011.

"Destructive winds with gusts over 125 kmh are occurring about the coast and islands between about Bowen and Midge Point, including Proserpine, and will extend further along the coast to areas between Ayr and Sarina during the morning or afternoon," BOM said Tuesday.

The destructive winds may extend further northwest along the coast to Townsville and to adjacent inland areas including Collinsville during the day, it said.

Areas of heavy rain with the potential to cause severe flash flooding have developed around the Central Coast and are forecast to spread to other parts of the northern and central Queensland coast and adjacent inland areas during the day, it said.

"Widespread daily rainfall totals of 150 to 250 mm, with isolated event totals over 500 mm, are also likely to lead to major river flooding over a broad area this week, and a flood watch is current for coastal catchments between Rollingstone and Gladstone, extending inland to the Upper Flinders Thomson and Barcoo catchments," it added.

--Nathan Richardson, newsdesk@spglobal.com

--Edited by E Shailaja Nair, shailaja.nair@spglobal.com