Recent storms and flooding in Queensland have halted port and rail movements, curtailed production at surface mines and restricted access to underground operations. “Industrial actions” (strikes) by union are also affecting the Australian coal chain.
BHP Billiton Ltd. (BHP), the world’s largest coking coal exporter, said it may miss deliveries from its Australian mines after strikes and rain affected output. Thousands of miners walked off the job during the last week of March after talks broke down between BMA and the Construction Forestry Mining and Energy Union. Bloomberg reported that BHP Billiton Mitsubishi Alliance (BMA) has declared force majeure because of the striking miners and wet weather.
Thus far, Peabody Energy has only been affected by the weather and it is already estimating of the impacts at approximately $50 million for the first quarter related to lower production and sales volumes and higher costs due to volume impacts and recovery expenses.
“Disruptions such as these point to the tight supply-demand balance that exist for seaborne metallurgical and thermal coal,” said Peabody Energy Chairman and CEO Greg Boyce. “Peabody continues to target significant increases in its Australia coal exports in 2012 to serve rising global demand for both metallurgical and thermal coal products.”