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Coal Mines in Australia's Queensland Brace for Cyclone After Worst Flood

Australia’s Queensland state, recovering from the nation’s worst flood disaster, is bracing for a cyclone expected to hit its northeastern coast within three days, threatening more damage to stricken coal mines.

Tropical Cyclone Anthony reformed into a cyclone today and is likely to hit the coast between Mackay and Cooktown on Jan. 30 or Jan. 31, the Bureau of Meteorology said. On the other side of the continent, Western Australia’s state capital Perth is preparing for dangerous weather triggered by another cyclone and catastrophic fire conditions.

Almost two months of torrential rains in the Queensland have killed as many as 32 people, damaged about 30,000 properties, cut rail lines and spoiled crops. Lost coal production may cost as much as A$9.5 billion ($9.4 billion), with 85 percent of coal mines in the Australian state, the biggest exporter of the steelmaking commodity, “impaired by excess water,” Queensland Resources Council said yesterday.

Cyclone Anthony may reach a Category 2 intensity, out of a scale of one to five, with five being the highest, bureau forecaster Rick Threlfall said in a phone interview from Brisbane. Queensland coal-mining districts may be affected with storms and heavy rain, he said.

“Areas of concern at this stage would be the central coalfields area such as Emerald, but pretty much everywhere on that coastal strip and inland could see very heavy rainfalls early next week,” Threlfall said.

Drenched Pits

The floods caused BHP Billiton Ltd. and Rio Tinto Group to declare force majeure, a legal clause that allows producers to miss deliveries. The removal of water from pits is likely to be affected by the “state government’s risk-averse environment regulator,” the lack of pumping equipment and water damage, the Resources Council said yesterday.

Steelmakers in Asia may be forced to pay as much as 78 percent more for three-month hard coking coal contracts starting April 1 after flooding disrupted output, according to Bank of America Merrill Lynch.

Queensland has 57 producing coal mines, according to the Resources Council. It may take two to three months for normal operations to resume, the government said last week.

Another system has formed off Fiji and could hit Queensland as a Category 4 or Category 5 cyclone as early as Feb. 3, the Australian Broadcasting Corp. reported, citing state Premier Anna Bligh.

Cyclone, Heatwave

In Western Australia, Perth is preparing for a weekend of extreme weather conditions triggered by Severe Tropical Cyclone Bianca and a heatwave.

People living in the southwest of the state, which includes Perth, have been urged to prepare for extreme to catastrophic fire conditions, damaging winds, dangerous seas, localized flooding and potential storm surge activity during the next two days, the state’s Fire & Emergency Service said in an e-mailed statement today.

Bianca, a Category 3 cyclone, was 510 kilometers (317 miles) west-southwest of the town of Exmouth at 11 a.m. local time today. It’s forecast to weaken as it tracks southwest before heading to Perth by Jan. 30, according to the bureau’s website.

Perth’s temperature reached 38 degrees Celsius (100 degrees Fahrenheit) today. It is expected to be matched tomorrow, which will lead to dangerous fire conditions, the Bureau of Meteorology said.

Rig Disruptions

The bureau has removed onshore warnings for Severe Tropical Cyclone Bianca, which caused disruptions to oil output for Chevron Corp., Santos Ltd., Woodside Petroleum Ltd. and Apache Corp.

Santos, Australia’s third-largest oil and gas producer, expects the Mutineer-Exeter project off Western Australia to restart within two weeks in the absence of another cyclone, spokesman Matthew Doman said by phone today from Adelaide. The platform has been sent to Dampier for maintenance, he said.

Woodside hasn’t restarted output at its Enfield or Cossack Pioneer ventures, spokeswoman Laura Hammer said by phone today from Perth. Apache production at the Stag oil field also hasn’t resumed, spokesman Matthew Coomber said from Perth.

Chevron resumed operations at oil fields off northwestern Australia, it said in an e-mailed statement today.

Western Australia, about four times the size of France, accounts for 62 percent of the nation’s mineral production, 75 percent of natural gas and 64 percent of crude oil and condensate, according to state government figures.

To contact the reporter on this story: Jason Scott in Perth at Jscott14@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net.

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