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WRAPUP 1-Draining flooded Australia mines could take weeks

by (c) Copyright Thomson Reuters 2011. Click For Restrictions. http://about.reuters.com/fulllegal.asp | Thomson Reuters Foundation
Thursday, 6 January 2011 01:28 GMT

* Flooded coal mines could take weeks to drain: Anglo

* Rail lines to Rio, BHP, Xstrata mines still closed

* Economic cost estimated around ${esc.dollar}5 billion (Adds quote, background)

SYDNEY, Jan 6 (Reuters) - Northern Australia's flood-stricken coal industry braced for prolonged shut-downs on Thursday when a major miner said it could take weeks to drain its pits and resume digging.

London-listed Anglo American , one of the country's top-three miners of steel-making coal, said it was preparing to pump water out of its flooded mines but that it was too early to say when these collieries could resume production.

"Our focus is currently on mobilising our people and other resources and de-watering flooded coal pits, which we estimate will take some weeks," Seamus French, head of the group's metallurgical coal division, said in a statement.

Anglo has about seven coal mines in flooded Queensland state, which accounts for most of Australia's coking-coal exports, which in turn account for two-thirds of global exports.

Anglo's major rivals, Rio Tinto , Xstrata and BHP Billiton , have also been hit by the floods, the worst in at least 50 years, and all have been forced to declare force majeure, which companies can evoke to release them from delivery obligations.

The flooding has begun to recede in some coal fields, but all four major producers continue to face supply disruptions and have yet to say when operations would return to normal.

"It's impossible to say at present (how long coal operations will down). If there are no further weather events, things could be back to normal within a month, however we are only at the start of the wet season," Colin Hamilton of Macquarie Commodities Research in London told Reuters in an email.

About 200,000 people scattered across an area the size of France and Germany combined have been affected by the flooding in Queensland, the centre of the nation's coking-coal industry.

Three people have been killed in the floods and hundreds made homeless, but the economic cost of the inundation, which some scientists have linked to global warming and rising sea temperatures, is already widely estimated at around ${esc.dollar}5 billion.

Roads, rail lines and bridges have been submerged, and authorities are waiting for the waters to recede before they can assess how much vital infrastructure needs to be rebuilt.

QR National, the country's biggest coal freight business, said on Thursday it was ramping up operations on a recently reopened rail line, enabling more coal to reach the coast, but problems remained elsewhere on its flood-hit network.

A QR National spokesman said more tonnage was reaching Gladstone port on its Moura line, which services Anglo-American's Callide and Dawson mines as well as Cockatoo Coal's Baralaba operation.

But QR National's Blackwater line remained closed, impacting operations for Wesfarmers , BHP Billiton, Xstrata and Rio Tinto.

"The Blackwater coal system remains closed and we are currently waiting for the flood waters to recede. That's expected to go well into next week," the spokesman said.

(Additional reporting by Amy Pyett) (Reporting by Rebekah Kebede; Editing by Mark Bendeich)

Our Standards: The Thomson Reuters Trust Principles.


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