BRISBANE’S coal explorers are taking a big hit as floods continue to wreak havoc throughout Queensland’s key mining areas.
Companies such as Xstrata and Arrow Energy are facing millions of dollars in lost production and damaged equipment at sites in the Bowen Basin while miners in the Surat Basin near Chinchilla are also bracing for big losses.
Macarthur Coal is the first to downgrade its profit guidance by as much as 22 per cent. It lowered its first-half profit guidance as a direct result of the floods. Based on preliminary results, first-half net profit after tax would be in the lower end of the guidance range of $97 million to $102m. Shares fell by as much as 2.6 per cent today, touching a low of $12.54, after the profit downgrade.
Macarthur CFO Graham Yerbury, says the company is still up to two weeks away from pumping water from its flooded pits in the Bowen Basin.
“At the moment we’re trying to draw water off the pits and that will depend on significant rain events,” he says.
Yerbury says the damage bill is yet to be realised, but the company has stopped shipping coal until the excess water can be pumped out.
“As you can imagine, we’re a fixed cost operation with trucks, shovels and draglines and we are yet to assess,” he says.
“Everyone is suffering the same impact, so we expect to get back to delivering coal to a fairly robust market.”
Mining technology company Runge reports that its gas testing operations will be on hold due to lack of exploration, but managing director Tony Kinnane is confident the work will be there once mining commences.
“Our gas testing operations will be affected by the floods and we expect it to be put on hold for a couple of months, but we won’t lose it,” he says.
Queensland supplies half of the world's coking coal for steel manufacturing but up to 75 per cent per of mines are not operational due to the floods.
Queensland Resources Council chief executive Michael Roche, says concerns over the economic impact of the floods on Queensland’s biggest export industries ran ‘a distant second’ to the immediate priorities of employee safety and the welfare of their communities.
Roche says Queensland’s minerals and energy companies were rallying behind flood-bound and threatened communities in central and southern Queensland with cash and in-kind contributions totalling millions of dollars.
“Many coal mines in the Bowen Basin are either operating with skeleton staff or focusing entirely on supporting their communities from what appears to be a major flood threat, especially in the central highlands,” Roche told the ABC.
“Mine employees who literally can’t get to work are volunteering for sandbagging work in Emerald and Capella, while at Blackwater, a mine’s workforce has been placed on standby to assist the local community if required.
“Coal seam gas company employees have been working alongside the SES and residents in the Chinchilla and Dalby regions and in between tending to their own families and homes, remain on standby to render whatever assistance they can.”
Roche says it was likely that lost coal and gas production would run to hundreds of millions of dollars but it was a situation that would be rectified over time.
“One of our member companies is currently sheltering 328 people evacuated from their homes at Theodore,” he says.
“This is a community contribution that will never be accurately measured in dollars but will be remembered for many years to come.”
Emergency Services Minister Neil Roberts today visited residents in Dalby and Emerald along with Federal Agriculture Minister Senator Joe Ludwig and Police Commissioner Bob Atkinson to assess response and recovery plans for the region.
In Dalby, Roberts attended the district disaster management meeting where the Condamine recovery plan was discussed, visited the water purification plant to inspect flood damage and also talked to evacuees currently housed at the local agricultural college.
“Western Downs has been hard hit by the recent floods and as always it is a humbling experience to meet with local residents and evacuees who have been directly impacted,” he says.
“The full recovery from this major flooding event will take months and sometimes years but affected residents can rest assured that all levels of government are working hard to ensure a speedy recovery.”
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