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Queensland's coking coal exports look set for weeks of major disruptions after Aurizon confirmed that some of its key rail lines had been seriously damaged by flooding associated with Cyclone Debbie.
Early reports from resources companies indicated that their mines had escaped serious damage, unlike the aftermath of Cyclone Yasi where many pits were flooded and out of production for months.
However, while the Bowen Basin's mines may be quick to return to production, many will not be able to get their coal to port and onto ships for more than a month due to flood damage to rail lines.
The worst damage appears to be to the key Goonyella rail line that connects a large number of the Bowen Basin's mines to the massive Dalrymple Bay and Hay Point coal terminals.
This line closed on March 28 and Aurizon has reported "significant landslips", with initial engineering assessments indicating that it will take approximately five weeks to repair the damage.
[color=#000000][size=1]PHOTO:[/size][/color] Aurizon's Goonyella rail corridor is likely to be out of action for around five weeks. (Supplied: Aurizon)
The lengthy Goonyella outage will be compounded by a two to three-week closure of the Newlands rail system that connect mines in the northern Bowen Basin to Abbot Point.
The Moura rail system that connects to the Port of Gladstone is expected to be out of action for a couple of weeks, while Aurizon is hopeful that its Blackwater system into Gladstone will be open again by the end of the week, subject to further assessment as floods recede.
Severe supply disruption could double pricesCommodity analysts at S&P Global Platts warn that the disruption to exports could be almost as large as the roughly 20 million tonnes seen during Cyclone Yasi in 2011.
"Cumulatively, this could potentially disrupt approximately 15-20 million tonnes of met[allurgical] coal exports, according to three separate mining sources Monday, and could have significant implications on global seaborne met coal supply," they wrote in a note.
Metallurgical coal miners have been suffering from a drop-off in prices after a steep rally saw a high of $US310 per tonne reached on November 18 last year.
Prices had more than halved to $US151.50 per tonne ahead of Cyclone Debbie, but had already risen $US4.25 per tonne on Friday.
UBS commodity analyst Daniel Morgan told the ABC's Business PM program last week that prices could temporarily double back to $US300 a tonne if the cyclone-related supply disruptions were severe enough.
[color=#000000][size=1]PHOTO:[/size][/color] Metallurgical coal prices have a history of spiking on supply disruptions. (Supplied: S&P Global Platts)
Queensland supplies around half the world's seaborne supplies of coking coal.
That news boosted Whitehaven Coal's share price by 3.7 per cent today, as the New South Wales-based miner stands to benefit from a temporary uplift in prices caused by Queensland shortages.
Aurizon shares were down 1.1 per cent to $5.19, as the rail company said it was too early to tell how much the disruptions would affect its profits.
This article first appeared on www.abc.net.au
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