Wednesday, December 28,
Downpours over Australia’s coal-producing Queensland state over the last several weeks have forced several mining companies to declare force majeures as coal production and transportation have suffered.
Companies typically declare force majeure when they cannot honour legal contracts due to unforeseen acts beyond their control.
Queensland produces mostly coking coal which is exported to be used in steel-making, but some minres also produce thermal coal used in power generation. Queensland’s ports currently have an annual coal export capacity of 225 million tonnes per annum.
The wet weather has pushed up long-term pricing for coking coal, and also pulled up prices for thermal coal.
Despite the rains, Australian Bureau of Agricultural and Resource Economics and Sciences forecast that Australia’s metallurgical coal exports will climb 2 percent for 2010/11.
However, the bureau cut its production forecast for coking coal by 7.3 million tonnes.
Australia has recorded its wettest spring on record, said Australia’s weather bureau, and the downpours will continue with rainfall expected to exceed the median level from December through February in southeast Queensland and northeastern New South Wales, where coal production is concentrated.
Source: Reuters
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