Coal supply hit by floods

HEAVY rains are threatening to disrupt Queensland's coal industry, although the impact on supply is expected to be less severe than in 2011.

HEAVY rains are threatening to disrupt Queensland's coal industry, although the impact on supply is expected to be less severe than in 2011.

At the same time insurers were bracing for rising losses with floodwaters threatening Brisbane, after torrential rain so far left a trail of destruction down the Queensland coast. Insurance claims from the latest floods have already topped $43 million, as river levels continue to rise in in many parts.

Anglo-American advised it had shuttered some mines and Aurizon formerly QR National, said parts of its Central Queensland Coal Network were also closed.

A spokeswoman for Anglo's metallurgical coal division said Central Queensland had experienced "significant rainfall over the past few days and production at some of our operations has been impacted by flooding and temporary road and transportation access issues". But improving weather conditions had allowed Anglo to resume work in some areas.

Major Bowen Basin producers BHP Billiton and Rio Tinto gave no updates yesterday, saying any impact on production would be reported on in quarterly updates.

"We are obviously monitoring the weather impacts vigilantly and ensuring the safety of our people as a first priority," a BHP spokesman said. Xstrata told Bloomberg its Queensland Coal operations were not materially affected.

Freight operator Aurizon said after some impacts in northern Queensland late last week, the Newlands and Goonyella systems were now operating as normal while further south the Blackwater and Moura systems remained closed as damage was assessed.

Aurizon's bulk freight operations along the Queensland coast and coal operations on the West Moreton corridor were also affected by the closure of Queensland Rail corridors. Aurizon was working with customers "to minimise the impacts of heavy rain which has now moved south," a spokeswoman said.

On Saturday Port of Gladstone and Hay Point, the world's biggest export harbour for metallurgical coal, suspended ship loading due to the weather. Gladstone's suspension was lifted on Sunday morning.

Analysts expect any supply disruptions could help put a floor under coal prices, which soared in the wake of Queensland's 2011 floods. Hard coking coal peaked above $US330 a tonne that year but halved through 2012, according to IHS McCloskey's Bruce Jacques, who said there had been a small recovery in the last month before the storms..

The spot price was approaching $US170 ($A163) a tonne, he said, and it was likely the rains would "edge that up a bit further".

The storms in come as coal supplies from the Cerrejon mine in Colombia are threatened by strike action, and NSW's coal industry faces rail stoppages.

Four BHP Mitsubishi Alliance mines in central Queensland were last week allowed to carry out controlled releases of water in a pilot program announced by the state government last November.

Queensland Greens member and environmental medicine specialist Andrew Jeremijenko said on Monday the practice would make the central Queensland floods worse.

Queensland Environment Minister Andrew Powell said the releases were a continuation of similar practices under previous governments.

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