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Aussie Floods Impacting Global Coal Markets

January 14, 2011

Reuters reports: SYDNEY Jan 14 (Reuters) – Coal mines in Australia’s flood-ravaged Queensland state could take up to six months to return to full operation as the lack of water pumping and storage capacity is slowing efforts to clear pits, mining contractors said.

“There’s just nothing left to hire, all the pumps are working non-stop,” said Dave Walker, who manages water pumping for Total Water Management. “It could be months before all the water is out.”

Australia accounts for about two-thirds of global coking coal trade and Queensland produces roughly 90 percent of Australia’s share.

The price of Australian premium coking coal has jumped 35 percent since flooding begun, forcing nearly 50 mines to shut, and eventually flooding Brisbane, the nation’s third biggest city.

Bloomberg Reports:

Alpha Natural, the third-largest U.S. coal producer, lifted its 2011 forecast for coking coal because Australia’s worst flooding in 50 years may increase demand.

The company expects to ship between 13 million and 14.5 million tons of metallurgical coal, used to forge steel, up from an earlier forecast of 11.5 million to 13.5 million tons shipped, according to a statement today from Abingdon, Virginia- based Alpha.

Queensland supplies 50 percent of the world’s seaborne metallurgical coal, or about 140 million metric tons a year, according to Bank of America Merrill Lynch. The flooding in that region has affected an area larger than Texas and California combined.

Related news from MSNBC

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