UPDATE 1-Australia's Aurizon expects to reopen coal rail line by end of week

Sun Feb 3, 2013 10:35pm EST

Related Topics

* Key Blackwater coal rail line in Australia impacted by flooding

* Operator Aurizon says 2nd Moura line will take up to Feb 25 to be fully repaired

* Wood Mackenzie forecast 1-week loss from coal mines at 1.5 mln tonnes

By James Regan

SYDNEY, Feb 4 (Reuters) - The key Blackwater coal haulage line in Australia is expected to reopen by the end of this week after flooding caused it to shut down, halting shipments from major collieries, including Rio Tinto and Xstrata .

Torrential rains and flooding in late January, in a region producing about half of the world's coking coal, cut rail haulage lines and other infrastructure and shut mines and ports handling both coking and thermal coals.

Aurizon Holdings, which owns the rail lines that connect many of the region's collieries with shipping ports, has had two of its major rail haulage lines, Blackwater and Moura, shut since last week.

"Repairs have commenced and at this stage we expect the Blackwater system to reopen by the end of the week," Aurizon said.

The Moura line, servicing the 7-million-tonnes-per-year Dawson mine owned jointly by Anglo American and Mitsui faces a longer repair time, due to extensive track damage, Aurizon said.

The 700,000-tonnes-per-year Baralaba coal mine owned by Cockatoo Coal also relies on the Moura line.

Aurizon said it expected to progressively reopen the Moura line between Feb. 18 and Feb. 25.

Rio Tinto and Xstrata last week declared force majeure on metallurgical and thermal coal shipments transported on the Blackwater line.

Consulting group Wood Mackenzie forecasts that the mines directly impacted and those dependent on closed rail networks account for 78 million tonnes of production for the export market in 2013.

One week of lost production from these mines amounts to 1.5 million tonnes, 60 percent of which is metallurgical coal, it said.

The wet weather is still a long way from causing the level of havoc seen in 2011, when many mines were inundated with water and took months to come back to full production, coal industry experts said.

"The majority of mines have not been as severely impacted as 2011 and have been able to continue operations and stockpile tonnes, Aurizon said.

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