The analysts drew up a list of the mines with potential to use the Blackwater rail corridor, including Kestrel, Cook, Xstrata’s Oaky Creek and Rolleston operations, BMA’s Blackwater, Gregory and Crinum East operations, Anglo’s German Creek and Foxleigh mines, along with Yarrabee, Ensham and Jellinbah.

From the recent spate of wet weather in the state, Macquarie estimated a loss of 1Mt of coal production as a worst-case scenario.

Despite the infrastructure and wet weather woes, the analysts do not foresee any huge price hikes for metallurgical coal.

“We believe the market is extremely tight, however not to the extent which saw $400 per tonne spot prices in 2008.”

But the bank’s research division still rates met coal as its favoured bulk commodity and is more bullish on the upcoming benchmark negotiations for the next Japanese financial year.

“The current situation should not force the Japanese steel mills to push the panic button, as the circumstances are not as damaging as they were in 2008,” Macquarie said.

“However, the last remaining slack has now come out of the supply chain, such that any further disruption will have a significant price effect.

“We believe there is still potential upside for the current spot price prior to contract negotiations being settled, particularly with the ongoing debate over the contract pricing period.”

Macquarie said “BHP’s insistence” and the absence of other viable options made it probable that quarterly contracts might become an established market practice, in contrast to annual deals.

“We believe some annual contract agreements will be reached, however at an inflated price to the initial quarterly deals.

“This would also reflect the bullish market fundamentals for met coal through the short and medium term.”