Perth (Platts)--16Feb2011/752 am EST/1252 GMT
A Queensland-based coal miner and other producers in the Australian state may need a year to clear the backlog in contracted coal exports that have accumulated as a result of calamitous flooding since last December, according to a senior mining source Wednesday. "We are getting many requests each day for coal and I'm sure we are not alone...but we cannot even consider additional sales until we have cleared the force majeure backlog and I think that will take until 2012 for most mines," said the official at a Queensland coal company. The recent deluge in Queensland is estimated to have affected as many as 50 out of the state's 57 operating coal mines, according to mining industry body Queensland Resources Council which represents companies such as BHP Billiton, Rio Tinto and Xstrata. Queensland supplies the majority of seaborne coking coal to world markets, mainly to customers in Northeast Asia and India, Europe, and Brazil. Thermal coal mines in Australia's New South Wales state have also been inundated by heavy rainfall, most recently Xstrata's Ulan underground mine in the Western coalfield which declared force majeure on Monday. Production at some Whitehaven Coal mines in the state's northern Gunnedah coalfield has also suffered because of wet weather. "The fact is that almost all mines in Queensland and some in New South Wales are still on force majeure, still are not nearly back to normal production, and will have considerable carry-over tons to deliver before they even consider new sales," said the source, a senior executive at a Queensland coal mining company who requested anonymity as it is not his official capacity to speak to the media. "Add to this, Ulan's 4 million mt/year, and Rolleston's 6 million mt/year, and you have a big shortage looming. I would estimate that around 8 million mt of thermal coal production has been lost from Queensland mines alone and with [railway operator] QR National pushed to the limit, there is little chance of getting extra tons down the line," the source added. Xstrata said last month that its Rolleston thermal mine in the Bowen Basin was unlikely to export any coal until the end of February as it waited for rail services to be restored to its southern spur of the Blackwater rail system after flooding. Some Queensland coal mines have invoked force majeure clauses in their supply contracts allowing them to suspend coal deliveries to customers because rainwater in their open-cut pits means they are unable to dig out coal. A Queensland Resources Council statement released in January said that against a "business as usual baseline" of 51 million mt of coal production (export and domestic) per quarter in Queensland, the organization's analysis was that production in the March 2011-ended quarter was expected to "fall by at least 25% and up to 50% under a high impact scenario" as a result of heavy rainfall in December 2010 and January 2011. The QRC's forecast would equate to a decline of between 12.75 million to 25.5 million mt in the state's coal production in the current quarter. A coal market analyst said it was his understanding that on an accumulated basis, coal exports from Queensland had halved in January compared with last December, however, he said there were some grounds for optimism that the coal industry in Queensland was recovering. "The general situation seems to be that damage is not as bad as first thought. Most facilities are back to work, or are moving material. The main impact has been on mine coal stockpiles which are heavily depleted," the analyst said. --Mike Cooper, michael_cooper@platts.comSimilar stories appear in International Coal Report. See more information at http://bit.ly/InternationalCoalReport