The impact of the flooding on the West Moreton rail system from Brisbane to Toowoomba includes at least one severed bridge.
Apart from the Wilkie Creek mine, New Hope Coal and Surat Basin miner Syntech Resources are also affected by the damaged rail.
With Wilkie Creek potentially cut off from rail for up to three months, a Peabody spokesperson told ILN the company was investigating alternative transportation methods.
She said most staff were back at work at the company’s other Queensland operations.
In late March 2010, Peabody sought federal environmental approval to expand Wilkie Creek from 2.3 million tonnes per annum of thermal coal to 10Mtpa.
However, the application was withdrawn on December 8.
During a conference call with analysts, Peabody's chairman and chief executive Gregory Boyce and the company's executive vice president and chief financial officer Mike Crews discussed the impact of the Australian flooding on the company and estimated that the floods could cut production across the whole industry by 15 million to 20 million tons this year.
QUESTION: Can you give us some clarity on your expectations for cost and how it will move throughout 2011 and the first quarter, and your 15-to-20-million-ton impact — is that kind of a best-case scenario or could it actually be worse than that?
CREWS: We expect higher average costs in the first quarter. You've still got a knock-on impact of the weather-related issues that we're going to have to deal with. At the same time, it remains to be seen what that's going to be. It's a little tough at this point to give you specific guidance as to what it's going to be in the first quarter.
BOYCE: Just to make sure everyone's clear — the 15-to-20-million-ton impact I was talking about is industry-wide, obviously not fully within our platform. So as Mike indicated, we will have more clarity as we get through the quarter in terms of what the full impact is.
Do we think the 15 to 20 million may be the end of it? It may not be. We don't have visibility into what all the other producers and what their areas of impact are. The 15 to 20 million may actually increase somewhat as we go through the rest of the first quarter and the recovery efforts really kick into place.
What everybody has to remember is there is a significant amount of recovery across all of Queensland that has to take place, not just the coal sector.The resources will be strained as everybody tries to get back up and running, and get the rail and the ports where they need to be.
