Tropical Cyclone Shuts Australia Coal Port, Threatens Sugar Fields

By | March 19, 2010

A tropical cyclone forced Australia’s second-biggest coal port to close on Friday, bringing millions of tons of coal shipments to a halt and threatening to damage thousands of acres of sugar-cane fields.

Australia’s Dalrymple Bay coal terminal ceased operations due to the approaching storm, which is packing winds of more than 150 kilometers (94 mph) per hour, a terminal spokesman said, adding that the port might have to evacuate staff.

“We’ve ceased operations and our last ship has sailed,” the spokesman said, adding it would be Monday at the earliest before the terminal could be expected to reopen.

Australia is the world’s biggest exporter of coal, most of it shipped out of Dalrymple in the northeast and Newcastle further south, and is also the third-largest exporter of sugar.

Dalrymple Bay predominately handles exports of metallurgical coals mined in the Bowen Basin and used in steelmaking, though it also exports thermal coal employed in power generation. The terminal typically operates around the clock, handling up to 85 million tons a year.

BHP Billiton, Rio Tinto, Xstrata, Peabody Energy and Macarthur Coal are among firms relying on Dalrymple Bay to export millions of tons of coal annually.

BHP said its Hay Point coal terminal, which is part of the miner’s BHP Mitsubishi Alliance with Mitsubishi Corp, remains closed. Operations were suspended on March 11 because of poor weather, it said.

“Railings to the terminal ceased on Thursday and production at some mines was being impacted because of stockpile limits,” BHP said in a statement. “We will continue to monitor conditions to decide when it is safe to berth vessels.”

Macarthur Coal said it would declare force majeure on all accepted vessels at the port and that the closure would alter its full-year forecast for between 4.8 million and 5 million tons in coal sales.

A Rio Tinto spokeswoman said metallurgical coal production from its Hail Creek colliery was operating normally, with coal being stockpiled while the Dalrymple Bay terminal remains closed.

Tropical cyclone Ului continues to track toward the coast of northern Queensland state and on current predictions is expected to hit land on Sunday morning near the sugar-growing region of Mackay, according to the Bureau of Meteorology.

That would put the storm’s first landing 385 km (240 miles) south of the port of Townsville, where an Xstrata-run refinery produces 300,000 tons of copper cathode annually from material mined in Australia and Chile.

An Xstrata spokeswoman said the refinery was operating normally for now. “We are of course keeping an eye on the cyclone, but operations have not been impacted,” she added.

Sugar crops in Queensland, where about 95 percent of Australia’s cane is grown, are also under threat.

Cyclones often turn into rain depressions which bring substantial falls that can lead to prolonged flooding.

Sugar farming group Canegrowers says crops have benefited from tropical downpours in recent weeks but torrential rains caused by the cyclone could flood cane fields and damage crops.

Australia is forecast to export 3.2 million tons of sugar from the 2010 crop, largely to Indonesia, Japan and South Korea.

“We’ve probably had enough rain for now but we can have cyclones all the way through to April so we have to run the gauntlet until then,” said Canegrowers Chief Executive Ian Ballantyne.

(Additional reporting by Bruce Hextall; Editing by Michael Urquhart, Himani Sarkar)

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