Extreme flooding hits coal supply chains

posted by Lucy Patchett
29 March 2021

Australia’s extreme flooding has caused disruption to coal supply chains in New South Wales (NSW).

Mining companies with operations in the most affected areas of NSW have had to suspend or limit production, including coal production giants run by Glencore and Yancoal Australia.

Flooding across NSW and southern Queensland, which started on 18 March, has led to the NSW government declaring natural disasters across 34 local government areas, and the evacuation of over 18,000 people.

Glencore said its coal operations in Hunter Valley, north of Sydney, had decided to take "precautionary measures, including the decision to operate at reduced capacity at some sites".

“We continue to monitor the current weather events across NSW and have robust infrastructure installed at each of our sites to minimise impacts,” Glencore added. Operations at its Queensland coal sites remain uninterrupted.

Yancoal Australia suspended production at two open-cut mines in the Hunter Valley region. 

It said in a statement to S&P Global: "There have also been interruptions to rail transportation and port operations. Given the rain event is anticipated to continue over the coming days, it is too early to provide an accurate indication of the extent of these production interruptions.”

According to Reuters, railways transporting coal from Hunter Valley mines to the Newcastle Port were closed from 18-20 March due to heavy rainfall measuring over one metre in some places, and later resumed limited services.

A spokesman at Australian Rail Track Corporation told The Business Times said last week: "High rainfall, potential for more severe flooding beyond the current impacts to the network, strong winds, fallen trees and debris, power failures and fallen power lines and power poles are all concerns which led to operations being halted."

Meanwhile, the agricultural sector has also taken a significant hit as farmers’ crops and equipment have been washed away by flooding.

James Jackson, president at the NSW Farmers Association, said the damage bill from flooding on the north coast, Sydney basin and north west regions was likely to run into hundreds of millions of dollars. 

“Our members are starting to count the immense cost of the damage, with a substantial impact on crops, pastures, infrastructure, oyster production and livestock losses. Many farmers now face a long flood recovery process after getting through drought, bushfires and a global pandemic,” he added. 

The federal and NSW government have declared that farmers are able to claim grants of up to $75,000 for short-term assistance, including with crop recovery and repairs to damaged farm infrastructure, such as fencing and equipment.

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