MELBOURNE/PERTH (Reuters) - Australia's coal industry is bracing for another blow to exports as a huge cyclone moves towards northern Queensland state, forcing two coal mines, part of the state's coal haulage system and several coal export ports to shut on Tuesday.
Queensland, Australia's largest coal-producing state, is still recovering from the floods which brought the state's mining industry to a near standstill and there is a risk that more severe weather could make recovery even more difficult.
Cyclone Yasi, which is expected to rival the strength of Hurricane Katrina which devastated New Orleans in 2005, will hit the Queensland coast early on Thursday, following close on the heels of Cyclone Anthony which soaked parts of the state over the weekend.
Xstrata Coal shut its Collinsville mine and said it was considering shutting its Newlands mine as well, while Rio Tinto shut its Hail Creek mine.
"This is shaping as a much larger and faster moving system which could impact a wider area in what is an already saturated landscape following Cyclone Anthony," Rio Tinto Coal Australia said in an e-mailed statement.
QR National, Australia's largest coal freight company, suspended operations on its Goonyella and Newlands rail lines which run from inland mines to coal ports.
The country's largest coking coal export terminal, Dalrymple Bay, was also shut due to the cyclone. But the state's second largest coal terminal at Gladstone Port, which lies outside of the cyclone warning area, remained open.
Australia is the world's largest exporter of coal and accounts for two-thirds of world exports for coking coal, which is used for steelmaking.
Severe weather in Queensland has resulted in volatility in coal prices, pushing up prices in the illiquid coking coal spot market and boosting thermal coal prices nearly 30 percent to over $140 per tonne in mid-January from about $110 per tonne at the beginning of the year.
On Tuesday, bids for thermal coal, which is used for power generation, rose to $129 per tonne, in part due to expectations for production disruptions in Queensland, market sources said.
The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, has also been affected. The index fell to its lowest in nearly two years on Monday, partly due to a severe slowdown in seaborne traffic from Australia to its Asian customers.
"Shipments have already halted due to the floods so not much has changed," a Singapore-based shipbroker said. "Freight rates are taking a real hammering."
More rains will delay what has already been a difficult recovery from the floods that left many mine pits inundated and rail lines underwater.
Queensland has granted temporary permission to 34 coal mines to pump out floodwater and is considering applications from another 17, the state's Department of Environmental and Resource Management said Tuesday.
The department regulates a total of 51 mines state-wide.
Australia's weather bureau is forecasting average to above-average rainfall and cyclone activity in the country's north over the next two weeks.
But the coal mining areas of central Queensland may escape the worst of heavy rains caused by tropical cyclone Yasi, Queensland state Premier Anna Bligh said.
(Reporting by Sonali Paul in Melbourme, Rebekah Kebede in Perth, Amy Pyett and Michael Smith in Sydney; Randy Fabi in Singapore; Editing by Ed Lane)
