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Flood bill could hit tens of millions

XSTRATA, Rio Tinto, BHP Billiton and Macarthur Coal have all cut coal production at Queensland mi...

Angie Tomlinson
Flood bill could hit tens of millions

Queensland Resources Council chief executive Michael Roche said yesterday coal production at certain mines in the Bowen Basin has had to be suspended or reduced due to safety concerns and restricted access.

"Disruptions extend to the north of the Bowen Basin, where Xstrata Coal is reporting lost production from its Newlands and Collinsville operations because of localised flooding and persistent rain," Roche said.

"While there have been some weather-induced rail interruptions, a number of mines whose production has been halted or severely curtailed are continuing to rail coal from mine site stockpiles."

At Rio Tinto's Kestrel Mine, operations have been suspended since Thursday after rain cut the main road workers use to travel to the mine.

Over the weekend Rio has used helicopters to ferry skeleton crews to Kestrel and Blair Athol to ensure train loading and other essential services, including site maintenance, continued.

Lennox said Kestrel was assessing the impact floods would have on production and was waiting for the conditions to peak and stabilise before assessing how best to remobilise its workforce.

At Blair Athol, near Clermont, mining operations ceased in the pit over the weekend for safety reasons.

Road access to the mine has reopened, and full operations are expected to resume in the coming days.

"Our primary focus at this time is the safety and wellbeing of our employees and their families. We have advised employees to stay at home, secure their residence, follow government emergency authority directions and provide assistance for flood relief if they are at all able to do so," Kestrel general manager operations Tony Lennox said Monday.

Macarthur Coal CEO Nicole Hollows said yesterday that mining at the company's Coppabella and Moorvale had been temporarily suspended.

The Coppabella site recorded more than 223mm in two days.

Hollows said the heavy rain has damaged haul roads, however, she did not expect the temporary shutdown would affect overall 2008 sales.

Both BHP and Ensham Resources, whose dragline was submerged by water in one of its pits over the weekend, have both declared force majeure.

Emergency Services Queensland said almost 2000 people have been evacuated at Emerald as flooding submerges homes. The Service said the peak of the Nogoa River is expected to be around 2pm today.

A peak flow level of 15.5m is predicted and the river height at 5am this morning was sitting at 15.08 metres. The river is rising at approximately three centimeters per hour.

At the anticipated peak level, water will flow over the Vince Lester Bridge in Emerald.

"The anticipated peak height does mean some inundation of houses in Emerald and there has already been some properties affected. Areas that are currently experiencing inundation include Opal St, Fysh St and Robert St where water has been reported as lapping at the doorways. There are no exact numbers of affected properties as these houses have already been vacated," Emergency Services Queensland said this morning.

Queensland minister for Emergency Services Neil Roberts has declared Emerald a disaster zone.

One positive that has resulted from the disaster for those mines still producing is a tightening in the market which according to analysts, will push coking coal prices beyond $US125 per tonne.

The Bowen Basin is the main home of Queensland's export coal industry, which is worth more than $18 billion a year to the state's economy and directly employs almost 23,000 people.

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