5 Jan 2011

Floods cost coal industry $A1 billion to date

7:05 am on 5 January 2011

The Queensland Resources Council says the floods have now cost the coal industry $A1 billion in lost production.

Three quarters of the state's coal fields are unable to operate due to being flooded.

The ABC reports about a dozen mines are inundated and others are running on reduced capacity.

Queensland coal mines produce more than 90 million tonnes per year.

QRC chief executive officer Michael Roche says flooding is still affecting the rail line to the Port of Gladstone in central Queensland.

It's going to be hard work to get that back into full production, he said. (The) mines have a lot of water to deal with.

The quicker we can get back into full production, the quicker we can be earning royalties for the people of Queensland.

The companies have declared force majeure.

The BBC reports Queensland is being closely watched by the global steel industry, because it exports half the coking coal needed to make the metal.

The price of Queensland coking coal has jumped to $US253 per tonne from $US225 in the past three weeks.

Prices peaked at $US305 during the last serious flooding in the state in 2008.

China Steel, which is based in Taiwan, usually gets 80% of its coking coal from Australia. The company said it was now turning to the spot market for alternative supplies.