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Australia’s Aurizon expects to reopen coal rail line this week

04 Feb 2013 18:38:52 | csd

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Physical coal spot prices in Australia were bullish on Monday despite rail freight company Aurizon expecting some of the rail lines that transport coal in Queensland to return at the end of this week.

Last Tuesday and Wednesday, global mining giants Xstrata and Rio Tinto declared forces majeures on some coal shipments from the port of Gladstone, in Queensland, after Australia was battered by tropical cyclone Oswald (see CSD 29 January 2013).

The haulage of thermal coal from mines in Queensland was badly affected by the floods. Aurizon said on Monday, Sydney time, it expects the Blackwater system, which is the largest in Queensland, to reopen at the end of the week.

The Moura system, which forms the Capricornia coal chain with Blackwater, was damaged more severely three kilometres of track needs to be replaced.

"Given the extent of the damage in these areas, we are expecting to open the Moura system progressively west from Boundary Hill from 18 February, with the last section impacting mines at Baralaba and Moura not to open until 25 February," said Mike Carter, executive vice president of Aurizon, in a statement.

Carter added that most of the lost haulage could be recovered. "The majority of mines have not been as severely impacted as 2011 and have been able to continue operations and stockpile tonnes," he said.

Australian coal swaps prices at FOB Newcastle have been boosted by the floods in recent sessions, but physical spot prices have been even more bullish.

On Monday, brokerage globalCOAL reported a 25,000-tonne March '13 cargo was sold for $97/tonne. The last fixed-price deal for a March cargo was sold at $96/tonne on 20 January.

Two 25,000 tonne cargoes for April and May delivery were sold at $95.50/tonne each, again through globalCOAL, highlighting the premium for spot cargoes at the moment.

The forces majeures declarations by Swiss Xstrata and Anglo-Australian Rio Tinto remain in place for now.

Newcastle coal shipments

Weekly coal shipments from the Australian port of Newcastle declined 11% week on week, despite floods in east of the country not hitting Hunter Valley as hard as other areas.

In total, 2.4m tonnes was shipped from Australia's biggest port for exporting thermal coal in the week ending 4 February, according to Newcastle Port Corp data released on Monday.

Only 24 ships entered the port over the seven-day period, down from 30 the week before. The data shows 50 ships have a notified arrival time at the port, a reduction from 59 the week before.

At midnight on 3 February, stocks at the two coal terminals operated by Port Waratah Coal Services increased to just under 1.1m tonnes from 940,000 tonnes a week earlier. Fionn O'Raghallaigh

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