Australia’s mines batten the hatches

BHP BILLITON and Glencore are halting production at some coal mines in Australia’s Queensland before the biggest cyclone to hit the state in six years approaches the east coast.

South Walker Creek metallurgical coal mine operations were suspended from the end of day shift yesterday and preparations are under way to manage increased rainfall throughout the week, BHP said. Glencore is preparing to temporarily halt output from the Collinsville and Newlands mines, the company said.

Severe tropical cyclone Debbie, the biggest since 2011, is forecast to cross the coast this morning with wind gusts up to 240km/h, according to the Bureau of Meteorology. Australia is the world’s biggest exporter of metallurgical coal, used to make steel, and previous storms have flooded mines, swamped machinery and led to price spikes.

“The production impact is likely to be from drenching rain at the mines rather than a hit to the ship-loaders or the port infrastructure,” said Robin Griffin, a research director at Wood Mackenzie in Brisbane.

“Producers are much better prepared after 2011. Most miners increased their defences by boosting their levies from a one in 500-year event to a one in 1 000-year event.” Stowed Aurizon, Australia’s largest freight rail operator, has stopped delivering coal to the export ports of Abbot Point, Dalrymple Bay and Hay Point, the company said on Sunday. Trains operating on the Goonyella and Newlands systems have been stowed, or are in the process of being stowed, it said.

Debbie is “very dangerous, and of a size not seen in Queensland since severe tropical cyclone Yasi in 2011,” said Bruce Gunn, the state’s regional director for the Bureau of Meteorology. Debbie is expected to strengthen to a Category 4 by the time it makes landfall. – Bloomberg