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Queensland Cuts Coal Output Forecast 10.5% on Floods

Jan. 19 (Bloomberg) -- Queensland cut its annual steelmaking-coal output forecast by 10.5 percent and said it expects resumption of normal mining to take as long three months after floods in Australia, the biggest exporter of the fuel.

Coking-coal output in the 12 months ended June 30 is forecast to be 177.3 million metric tons, down from an initial projection of 198 million tons, Mines and Energy Minister Stephen Robertson said in a telephone interview. That compares with 182.1 million in the year ended June 30, 2010.

“Queensland is the world’s largest exporter of seaborne coal, so when our supply chains get interrupted that’s felt by a large part of the world,” Robertson said. “We’ve experienced the largest natural disaster in our history, with flooding that has enveloped almost three-quarters” of the state, he said.

The worst flooding in 50 years may have cost A$2.3 billion ($2.31 billion) in lost coal sales, the Queensland Resources Council estimates, with only 15 percent of the state’s mines operating at full production. It may take between two to three months for normal operations to resume, Robertson said.

BHP Billiton Ltd. and Xstrata Plc are among producers who’ve said they may miss deliveries. Force majeure remains in place at four mines operated by Rio Tinto Group, the company said yesterday in its fourth quarter operations report. Force majeure is a legal clause invoked by companies when they can’t meet obligations because of circumstances beyond their control.

‘Critical Low’

Train services will restart on some parts of the Blackwater rail line today, transporting coal to the export harbor of Gladstone, QR National Ltd. Chief Executive Officer Lance Hockridge said in a statement. The track has been closed since Dec. 27 because of flooding.

“Our stockpile remains at a critical low of just over 300,000 tons,” Gladstone Ports Corp. Chief Executive Officer Leo Zussino said in an e-mailed statement. “We would expect to be able to load around 2 million tons of coal this month with the port reaching full capacity by the end of March.”

Gladstone is about 450 kilometers (280 miles) north of the Queensland capital of Brisbane. It exported 60.6 million tons in the 12 months ended June 30, 2010. Ten vessels are at anchor waiting to load cargoes from the port, with a further six ships expected in the coming week, Zussino said.

Australian hard prime coking coal used by steelmakers sold for $280 a metric ton on average last week, up from $265 the week before, according to IHS McCloskey, a Petersfield, U.K.- based provider of coal data. Prices may reach $300 a ton this year, McCloskey said Jan. 17.

To contact the reporter on this story: Ben Sharples in Melbourne at

To contact the editor responsible for this story: Jane Lee in Kuala Lumpur at

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