BHP Lifts Force Majeure at Queensland Coal Mines, Doyle Says
BHP Billiton Ltd. (BHP), the world’s biggest coking coal exporter, lifted a force majeure on its Queensland, Australia, coal operation as it recovers from work halts, according to Doyle Trading Consultants LLC.
The mines, part of the BHP Billiton Mitsubishi Alliance, issued the declaration April 2 after battling seasonal flooding and rolling strikes. Force majeure is used when suppliers can’t meet obligations because of circumstances beyond their control.
BHP, based in Melbourne, and the unions agreed earlier this month on a framework that will guide the completion of an enterprise pact. The BMA joint venture supplies about 18 percent of global coking coal exports, according to Goldman Sachs Australia Pty.
“We believe it will take a few months before full production resumes,” said Ted O’Brien, a New York-based vice president at Doyle Trading, an energy research firm that specializes in coal.
Ruban Yogarajah, a spokesman for BHP in London, declined to comment, citing company policy.
Global metallurgical coal prices may fall as supply pours back into the market and as the world’s economy sputters, O’Brien said. Benchmark metallurgical coal, used to make steel, is $225 a ton for the July-September period, according data compiled by Bloomberg.
“Global demand for met is soft due to macroeconomic concerns and seasonality, so any additional supplies will put pressure on met prices,” O’Brien said. “The tons aren’t really needed right now.”
About 3,000 miners at seven operations stopped work for a week in March and have held further strikes since. The rolling work halts began in June 2011.
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