* Higher levees, better planning mitigated impact
* Mines plan for more stringent measures going forward
By Rebekah Kebede
PERTH, Jan 24 As floods that nearly brought
Australia's $50-billion coal industry to a halt recede in the
state of Queensland, coal mines that stepped up precautions
after similar flooding in 2008 may be able to rebound faster.
The flooding in recent weeks, brought on by rains triggered
by a La Nina Pacific weather pattern, caused coal price spikes.
"Our analysis suggests better contingency planning after the
equally severe 2008 floods, including increased pumping and
drainage capacity, has left the industry in good stead for a
sustained recovery in the second quarter," analyst Mark Pervan
with Australia New Zealand Bank said in a note on Monday.
"In the absence of another flooding event-- not entirely out
of the question -- prices should ease back to the $120 tonne in
the coming weeks," he said, referring to the Australian thermal
Australia is the world's largest coking coal exporter and
the second largest thermal coal exporter after Indonesia. Coking
or metallurgical coal is used for steelmaking while thermal coal
is used for power generation.
The Queensland Resources Council estimated last week that
only 15 percent of the state's 57 coal mines are fully
operational, 60 percent are operating under restrictions and
another 25 percent have yet to restart production.
Analysts said decisions by Queensland mines to raise levees,
for instance, were now paying off.
"Mines that were hit fairly badly two years ago took some
pretty hard decisions on raising the height of levee protection
around certain pits. This time around, because of those changes,
they were kept relatively protected," said Tom Sartor, an
analyst at RBS Morgans in Brisbane.
Macarthur Coal , which has declared force majeure on
its Coppabella and Moorvale mines due to flooding, said its
increased focus on water management since 2008 has paid off.
A force majeure is a legal let-out suspending sales
obligations because of factors beyond a suppliers' control.
"Given that it's been an extraordinary weather event the
last couple of months, we've certainly contained it better as a
result of the investment in water infrastructure," said
Genevieve Fraser, a spokeswoman for Macarthur Coal.
Ensham Resources' Ensham mine also took additional
precautions after one of the company's draglines, a piece of
equipment used for mining, was submerged after flooding.
"(The Ensham mine) was spared inundation during the flood
event and that was primarily because of the flood protection
levees which were built in response to the 2008 floods," said
Marc Joshi, a spokesman for Ensham Resources.
Other mines will soon begin preparing for Queensland's next
floods and looking to take precautions to withstand even more
(Reporting by Rebekah Kebede)