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Flooding Hits Australia's NSW Coal Regions Again



By Jo Clarke

September 20, 2022 - Flooding has cut access to some sites owned by Australian coal mining firm Whitehaven, as the Namoi river burst its banks near the New South Wales (NSW) town of Gunnedah, with more rain forecast.

Water level in the Namoi River peaked at 8.16m on 18 September, flooding roads and causing temporary access problems to some Whitehaven sites. Waters are receding, but the Australian Bureau of Meteorology (BoM) forecasts more rain for 21-24 September, which could lead to more flooding. The river flows west from Gunnedah through the coal mining towns of Narrabri and Boggabri, and flooding is likely at both locations.

Whitehaven operates the 12.5mn t/yr Maules Creek thermal and coking coal mine and the 6mn t/yr Narrabri thermal coal mine in the region, while Itochu operates the 7mn t/yr Boggabri thermal and metallurgical coal mine. The Hunter Valley rail line that connects the mines to the port of Newcastle is still operating, although some access roads are closed, according to network operator Australian Rail Track.

The BoM has declared a La Nina event in the tropical Pacific, which combined with the negative Indian Ocean Dipole (IOD) and positive Southern Annular Mode (SAM) indicates above average rainfall for the rest of the year. Australia's coal exports were down by 8pc in the July 2021-June 2022 fiscal year compared with 2019-2020, which was the last year that was not a La Nina year.

Whitehaven is producing as much coal as possible to try to benefit from record high prices for high grade thermal coal, but wet weather, including flooding on the Hunter Valley rail link in July, has disrupted production and sales.

Argus last assessed high-grade 6,000 kcal/kg NAR thermal coal at $439.50/t fob Newcastle on 16 September, up from $383.82/t on 1 July and above the previous peak of $425.90/t on 20 May. It assessed lower grade 5,500 kcal/kg NAR coal at $189.49/t fob Newcastle on 16 September, up from $188.73/t on 1 July but down from a peak of $287.15/t on 11 March.

The heat-adjusted premium for higher grade thermal coal on a NAR 6,000 basis was a record $232.78/t on 16 September, up from $177.93/t on 1 July and compared with a very low $1.65/t in 2019, before a Chinese ban on Australian coal took full effect.

Argus assessed the semi-soft mid-volatile metallurgical coal price at $209.25/t fob Australia on 16 September, down from $260/t on 1 July and from $400/t on 31 May.



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