Apr 12, 2017

Sector awaits Debbie’s coal trade toll

Sector awaits Debbie’s coal trade toll

Central Queensland’s coal export and mining supply sectors are still waiting to gauge the full impact on industry of damaged transport infrastructure in the wake of Cyclone Debbie.

Coal network disruptions continue this week, with the Goonyella corridor between the Bowen Basin coalfields and Mackay’s Dalrymple Bay and Hay Point terminals hardest hit as operator Aurizon maintains estimates it will be out for five weeks (from April 3).

Coking coal prices in China spiked last week on news of the disruption to the Queensland sector.

Resource Industry Network chair Tony Caruso said the recent event had been very different to the 2010/11 flooding which impacted directly on many mine sites, leaving them struggling with excess water.

“In this event the impact has been more between the mine site and the port – a lot of the rail infrastructure and road infrastructure, and to a limited extent some of the mines themselves,” he said.

“It’s a bit hard to compare the two because the events have affected the industry in two different ways. Until they fully assess the rail infrastructure we don’t really know how this event is going to impact on this industry.”

Coal operations would build stockpiles or move product temporarily on to holding pads to maintain production, but this would depend on how soon they could start to shift product again, he said. Meanwhile ports could continue to dip into stockpiled coal to fill orders.

Resource Industry Network chair Tony Caruso.

“If there is a silver lining it is that it is pushing coal prices back up,” Mr Caruso said.

“What will be interesting to see is now the stockpiles will get consumed at the ports and there’s commentary that it could take up to 12 months to rebuild those stockpiles.

“I would have thought that’s going to keep a fairly strong demand on coal and keep the supply fairly tight as well.”

In addition to the rail cuts, Mr Caruso said much of the road network out to the Bowen Basin mines had been damaged.

“We’re down to single lane over the Eton Range, which is the main access from Mackay out to the Bowen Basin, and to the south over the Sarina Range the access has been cut altogether and is likely to be out for months,” he said.

“That is more access for workers – it was fairly restricted in terms of its load capacity for transport.”

Aurizon to offer alternative routes

Aurizon said today that recovery and repairs were continuing at multiple sites along the Goonyella corridor, including at Black Mountain which experienced significant landslides.

“Due to the repairs required on the eastern section of the Goonyella corridor, Aurizon Network will work with customers and supply chain partners (subject to its Access Undertaking obligations) who are serviced by this line to offer alternative routing options,” the company said.

“This may include railing from the western sections of the Goonyella system and north up the Newlands system to Abbot Point Coal Terminal, or south through the Blackwater system to the Port of Gladstone.”

The Blackwater system re-opened to coal traffic on Monday (April 10) and is operating under restricted conditions with some reduced capacity. Coal trains have been received at the Port of Gladstone.

The Newlands system is expected to re-open tomorrow morning (April 13) and the Moura system (connecting into the Port of Gladstone) reopened today.

Minister for Resources and Northern Australia Senator Matt Canavan said on Friday that the majority of mines in the affected area should be able to stay open and stockpile production and it was expected that they would then be in a position to make up for the lost transport time over the next few months.

“This is in contrast to the impacts from Cyclone Yasi in 2011, where mine production was significantly disrupted and about 26 million tonnes of coal exports were lost,” he said

Mr Canavan said It looked likely that about 12-13 million tonnes of coking coal exports would be delayed, and a further 2-3 million tonnes of thermal coal exports, although these numbers could change as the extent of the impacts became clearer.