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Floods Disrupt Australian Mining Operations

01/28/2013 | 11:00pm US/Eastern
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-- Aurizon forced to close rail lines after heavy rains

-- Yancoal, Anglo American report flooding

-- Disruption to transport links to hold up coal shipments

(Adds remarks from rail operator Aurizon from third paragraph, Xstrata from the fifth)

   By Rhiannon Hoyle 
 

SYDNEY--Storms battered Australia's east coast, disrupting coal exports as rail links were shut due to heavy flooding.

Several coalmining companies also reported flooding at open cut mines across the region Tuesday, as resource-rich Queensland state faced the heaviest rain in two years. Severe weather warnings remained in place.

Aurizon, Australia's largest rail freight company, said it was forced to close its Blackwater and Moura rail lines, which transport coal from over a dozen mines in the state's south to the major coal exporting port of Gladstone and nearby refineries. Crews were assessing the damage and working to get the lines running again, the company added.

Two rail lines in the north of the state, Newlands and Goonyella, were reopened after ex-tropical cyclone Oswald passed through the area, heading south, Aurizon said.

One of the mining companies affected by the rail closures, Xstrata Coal, a unit of Xstrata PLC (>> Xstrata AG), said it was looking at "contingency plans." That could include finding alternative routes to get its coal to port, or stockpiling material. Coal production wasn't "materially affected" by the storm, a company spokesman said.

Emergency officials said the current storm was less severe than floods that devastated the region in 2011, causing major damage to coal operations and denting production for months.

The Port of Gladstone was working with customers on plans to restart activities after it was forced to suspend operations at the weekend, a spokeswoman said.

Yancoal Australia Ltd. (>> Yancoal Australia Ltd) said Tuesday production at its Yarrabee and Middlemount open cut mines, in the state's coal-rich Bowen Basin, was disrupted by the heavy rainfall. Output at Middlemount mine, which it operates with Peabody Energy Corp. (>> Peabody Energy Corporation), would likely be affected for at least three weeks after a levee bank was breached by flood waters, the company said. Normal operations were likely to resume at the company's Yarrabee mine this week, it added.

Also Tuesday, Anglo American PLC (>> Anglo American plc), the second largest exporter of coking coal in Australia, said output from some of its operations was disrupted by flooding, along with the road and rail closures.

"Weather conditions in Queensland are now improving which is allowing us to resume work in some areas," a spokeswoman said in an emailed statement.

Gold producer Evolution Mining Ltd. (>> Evolution Mining Ltd) said that its Mt Rawdon operations, southwest of Bundaberg, which closed Saturday due to flooding, would be limited to processing low-grade stock piles of mined raw material when the plant reopens later this week, while the company removes water from the site's open pit.

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

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