Miners Declare Force Majeure on Unseasonal Rains in Australia

Unseasonal rains in Australia forced Macarthur Coal Ltd., Aquila Resources Ltd. and Vale SA to declare force majeure, while Xstrata Plc shut part of its rail system and said it would use stockpiles to supply customers.

Macarthur, the world’s largest producer of pulverized coal used in steelmaking, said heavy rain in Queensland’s Bowen Basin forced it to declare force majeure on deliveries. A profit forecast of A$115 million ($112 million) to A$125 million for the first half of the financial year to Dec. 31 may change, the Brisbane-based company today said, without elaborating, in a statement to the Australian stock exchange.

Queensland has had above average rainfall in recent weeks that has also hurt operations at mines owned by BHP Billiton, as well as disrupting loading at the Hay Point port. Force majeure is a legal clause invoked by companies when they can’t meet obligations because of circumstances beyond their control.

“Coal mining and production has been hampered by heavy rainfall in recent weeks and Macarthur Coal is now declaring force majeure to its customers under existing contracts,” Chief Executive Officer Nicole Hollows said in the statement. Macarthur is assessing “the impact of the unseasonal heavy rain on previous guidance.”

The company expected to produce 2.5 million to 2.7 million metric tons during the first half. Coal sales to Nov. 30 were 2.31 million tons, it said.

Aquila Resources Ltd. and Vale SA today said they may miss deliveries from their joint venture Isaac Plains coal mine in Australia’s Queensland state after heavy rain forced a halt to operations. Both partners have declared force majeure.

Xstrata Affected

Xstrata Plc, the world’s biggest thermal coal exporter, said coal production at its Rolleston and Newlands mines has been affected by the rains. It continues to meet deliveries from stockpiles, spokesman James Rickards told Bloomberg News. It has not declared force majeure.

Xstrata’s Goonyella train system is expected to reopen by 6.00 p.m. local time after heavy rains forced its shutdown earlier today, it said in a statement. The Blackwater system has been closed because of the rains. It will be inspected daily and operations will recommence “as soon as it is safe to do so,” Xstrata said in a statement. The Moura system will be closed from 6.00 p.m. today.

To contact the reporter on this story: Elisabeth Behrmann at Ebehrmann1@bloomberg.net

To contact the editor responsible for this story: Andrew Hobbs at ahobbs4@bloomberg.net

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