GUNNEDAH, New South Wales (CU)_A couple of days ago, several areas in the state of New South Wales were struck by floods, as parts of the Namoi rivers burst its banks and cut off roads following prolonged rain showers. The disastrous weather condition had a significant impact on the extractive industry of NSW, as floodwaters blocked access to several mines in the prime production regions of the state. On Sunday (28 Nov), Australia’s largest independent coal producer Whitehaven Coal was unable to access mines in the Gunnedah Basin, which were impacted by the rising water level of the Namoi River.
The flooding of the perennial river near Narrabri, where the coal mining company’s second-best mine is located, was described by the Bureau of Meteorology as “major”, while the agency also reported “moderate” flooding near the country’s prime thermal coal district, the Hunter Valley.
The disaster adds to a year of disruption faced by Australia’s coal industry. Just a year ago a shiploader at the Newcastle port that services the coalfields in NSW was blown off its rails by wild weather, an incident which slashed the port’s export capacity for months. This was following a deliberate reduction in coal prices by Glencore, an Anglo-Swiss multinational commodity trading and mining company, owing to operational problems and a price slump earlier that year.
Following a surge in prices of NSW thermal coal to $US244.11 per tonne in early-October, prices have eased to below $US140 per tonne over the past month. However, the recent floods may provide fresh support if exports are curbed, as experts are yet to determine the extent of disruption to the state’s coal industry.
A week ago, the meteorology department of Australia warned that the Pacific nation is likely to experience a summer that is “wetter than average”, on account of a La Nina pattern. The weather event, which is caused by warmer waters in the western Pacific Ocean, often results in above-average rainfall that could lead to tropical cyclones and widespread flooding.
