Cyclone leads to mining sector declaring force majeure

Cyclone Debbie has wreaked havoc on the communities of North Queensland and mining companies are counting the costs alongside communities in the process of cleaning up.

The category four storm made landfall between the towns of Ayr and Cape Hillsborough, north of Mackay, late on Tuesday morning. More than 150 roads have been closed due to floodwaters and debris between Mackay and Ayr – with most not expected to be open for the weekend.

The torrential downpours associated with the storm have forced major miners to slow or entirely halt production in the mining region.

Already, BHP Billiton said their Hay Point coal terminal near Mackay was closed alongside their projects at Goonyella Riverside, Peak Downs, Daunia and South Walker Creek and Poitrel.

Some work does continue at Broadmeadow, Caval Ridge and Saraji but has slowed dramatically.

Companies have already started to declare force majeure in the region including Yancoal whose Middlemount operation has been effected.

“It remains too early to determine the full impacts of the cyclone upon ports and rail,” a Yancoal spokesman said, adding that the duration of the force majeure has yet to be determined.

Aurizon which provides rail services for the coal sector has declared force majeure in three of its four metallurgical coal systems in the wider Central Queensland Coal Network.

“Aurizon is working closely today with supply chain partners (mines, ports and rail operators) on any potential flood threat to the Blackwater system. We will continue to monitor network availability as the weather event progresses southwest,” a spokesman said.

The disaster is likely to have an effect on the price of coal exports due to the nature of the Australian market. Cyclone Yasi in 2011 which was a similar sized system saw production fall by 20 million tonnes in that year.