UPDATE 2-Australia collieries could take weeks to recover from rains-council

Tue Jan 29, 2013 12:19am EST

* Coal miners hit by Australian rain storm

* BHP, Anglo, others still assessing damage

* Yancoal/Peabody mine hit

* Some gold miners affected

By James Regan

SYDNEY, Jan 29 (Reuters) - Heavy tropical rains inundating Australia's eastern coalfields, among the largest in the world, have cut rail haulage lines and shut down mines that could takes weeks to fully reactivate.

Emergency officials said the floods were severe, although not as widespread as the monsoon-like rains that saturated Queensland and New South Wales states in 2011. Thousands of people were being evacuated in the two eastern states and four people were reported killed.

Queensland's export coal industry could take several weeks to resume full production, Queensland Resources Council Chief Executive Michael Roche estimated.

Between 200 and 400 millimeters of rain fell over Queensland state's Bowen Basin, home to giant open pit mines owned by BHP Billiton <BLT.L., Mitsubishi Corp, Anglo American, Peabody Energy and others.

"Central Queensland has 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," an Anglo American statement said.

"Weather conditions in Queensland are now improving, which is allowing us to resume work in some areas, however, we continue to monitor the situation to ensure the safety of our employees," it said.

BHP said it was still assessing the impact to its operations across the Bowen Basin.

"All sites are operating and we are working to return to normal operations," it said.

A tropical low moving south along Queensland's coast was causing the flooding. At this stage, there was little likelihood the system would strengthen, according to the Australian Bureau of Meteorology.

Australia is the world's largest metallurgical coal exporter, accounting for roughly two-thirds of global trade. It also supplies thermal coals used in power generation.

Spot coking coal prices on Tuesday were pegged at over $167 per tonne, above the most recent quarterly settlement of $160.

YANCOAL/PEABODY MINE HIT

A levee bank surrounding the Middlemount mine in the Bowen Basin was breached and water flowed into the open cut, according to part owner Yancoal.

Production from the mine is likely to be affected for at least three weeks, although Yancoal could not say for certain.

Peabody and Yancoal Australia are joint owners of the mine.

Separately, production was suspended at Yancoal's Yarrabee mine at the weekend but was expected to resume this week.

Yancoal said it didn't expect the Yarrabee mine's production for the quarter to be affected by the suspension.

Late last week, transport group Aurizon Holdings Ltd was forced to shut parts of its freight rail operations that transport coal to the port of Gladstone, a key export terminal on the eastern seaboard.

"We are receiving reports of significant damage to the Blackwater and Moura rail systems that carry coal from the southern and central Bowen Basin to the Port of Gladstone, where operations have also been hampered by around 800 millimeters of rain,' Queensland Resource council's Roche said.

"Queensland's export coal industry could take several weeks to resume full production," he said.

Ship loadings at the port of Newcastle in New South Wales, the world's largest export terminal for thermal coal, were returning to normal following a one-day suspension on Sunday, when five ships left anchorage, according to a port spekesperson.

Australia's Newcastle spot index stood at$92.80 a tonne on Tuesday, little changed on the week, data from online trading platform globalCOAL showed.

Cyclones and rain during the 2010-2011 season forced dozens of companies to evacuate flooded coal mines and wiped out a significant amount of production for much of the year.

The immediate impact then was a sharp rise in coal prices.

The cyclonic storm season runs until April 30.

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