Jan. 17 (Bloomberg) -- Coal mines flooded by torrential rain in Australia’s Queensland state may take as many as six weeks to resume production, National Australia Bank Ltd. said.
The level of flooding and any further rain will determine when the mines reopen, National Australia Bank analysts led by Michael Bush said today in a report.
BHP Billiton Ltd., Rio Tinto Group, Xstrata Plc and other coking coal producers in Queensland, which supplies about half of global output, have said they may miss deliveries after Australia’s worst floods in 50 years. Coal prices in the second and third quarter may gain at least 10 percent to 15 percent from first-quarter prices that were negotiated last year, Bush said.
The stoppages are resulting in about A$600 million ($593 million) of lost revenue a week at current prices, he said. There are unlikely to be credit losses, he said. Xstrata, the world’s biggest exporter of thermal coal, is the most affected among the larger mining companies, he said.
The floods may have cost A$2.3 billion in lost sales, the Queensland Resources Council said in an emailed statement. About 15 percent of the state’s 57 coal mines are operating at full production, 60 percent have restrictions and 25 percent are yet to resume output, it said.
Some producers need further dispensation from the Department of Environment and Resource Management to pump flood water into nearby creeks, it said.
The Port of Brisbane, the nation’s third-busiest container harbor, said it will reopen to shipping today after closing because of strong currents and debris from the city’s flooding.
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