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Tropical Cyclone Debbie smashes into Australian Queensland's coal industry

Sydney — The coal industry in Australia's Queensland state was hit hard by Tropical Cyclone Debbie on Tuesday, and with heavy rains expected to continue for the coming days, it is too early to tell exactly how bad the damage is, a spokeswoman for the Queensland Resources Council said Wednesday.

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"It is likely the Bowen Basin will still see three to five days of torrential rain and it is not until that rain has fallen and the resulting flood patterns are known that any operational impacts will be apparent," she said.

An alleviating factor to the potential damage could be the lack of rain that the region has seen recently, she said.

"The wet season has been pretty dry, therefore, site water storages are not full, and in fact some companies will welcome the late rains," she said. "Experience from previous floods means companies have invested substantially in water management, making sites far more resilient in coping with heavy rainfall events," she said.



COAL ASSET CLOSURES


Mining has been temporarily suspended at BHP Billiton's central operations with only minimal personnel on sites for security and essential systems monitoring, a spokesman for the company said Wednesday.

"We are continually monitoring the situation and plans on when we can safely resume operations will be assessed once the weather eases," he said.

"[It's] worthwhile noting that while Tropical Cyclone Debbie has been downgraded to a low pressure system, the situation is still quite intense in central Queensland with winds [of over] 100 km/h and 100-250 mm rain expected over the next few days," he said.

There are also power cuts to coastal towns and flooding is forecast across the region over this week, he added.

It is understood that the impacted mines include six of BHP Billiton Mitsubishi Alliance's seven, and BHP Billiton Mitsui Coal's two mines.

BMA, which is 50:50 operated by BHP Billiton and Mitsubishi Development, operates Goonyella Riverside, Broadmeadow, Daunia, Peak Downs, Saraji, Blackwater and Caval Ridge.

BMC, which is 80% owned by BHP Billiton and 20% by Mitsui and Co., owns and operates the South Walker Creek mine and Poitrel mine.

BMA also owns and operates the Hay Point Coal Terminal near Mackay which was closed in preparation for the cyclone on the weekend.

The neighboring Dalrymple Bay Coal Terminal and the Abbot Point Coal Terminal further north in Queensland are also closed.

North Queensland Bulk Ports Corporation said Wednesday morning that they are inspecting the ports for damage.

The BHP Billiton spokesman said he cannot specify when Hay Point will reopen given that assessments are still being done and the weather is still bad in the region.

Stanmore Coal also said on Wednesday that its Isaac Plains coal mine has been placed into a protective phase with all mining operations ceased and key assets secured away from mining areas and potential water courses.

"The mine's port provider has issued a force majeure notice as part of their preparations to protect key assets and infrastructure," the company said.

"At this stage the company anticipates production will be impacted for the rest of the week, assuming no material damage is sustained to key mine assets or those assets of the mine's critical suppliers, including rail, port, water and power," it said.

Glencore also said earlier in the week that it has ceased operations at its Collinsville and Newlands mines.

Other miners in the region, such as Rio Tinto and Wesfarmers, were not available for immediate comment.

Tropical Cyclone Debbie made landfall Tuesday afternoon Australian Eastern Standard Time as a category 4 cyclone, which is the second highest on the Bureau of Meteorology's scale, the Australian bureau said Tuesday.

It has since been downgraded to a tropical low.

"Impacts due to heavy rain, damaging wind gusts, and abnormally high tides are still expected across a broad area," BOM said Wednesday.

--Nathan Richardson, newsdesk@spglobal.com

--Edited by Irene Tang, irene.tang@spglobal.com