Production downgrades as floods recede

WESFARMERS and Caledon Resources are downgrading their full year coal sales estimates from their Queensland operations because of the Christmas holiday deluge as the floods finally begin to abate.
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Wesfarmer's open cut Curagh Mine.

Lou Caruana

Flood waters from the Mackenzie River in central Queensland, which peaked on new year’s day, are now receding in the vicinity of Wesfarmer’s Curragh mine.

Wesfarmers Resources managing director Stewart Butel said all mining operations at Curragh are returning to normal, with the greatest impact of the floods being felt by Curragh North. It is still expected to be some time before the river returns to normal levels, he said.

“Mining at Curragh North will progressively return to normal by early February 2011 as we are able to get more employees to site and the overland conveyor returns to service. We have quite a bit of dewatering to undertake as a result of the unprecedented rainfall experienced in December 2010. We continue to have follow-up rain,” he said.

Throughout the flood Curragh North mining operations remained protected by the levee system. Production of metallurgical coal from Curragh for the 2011 financial year will be reduced because of the flood.

“Our estimate for full year sales of metallurgical coal is now in the range 5.8 to 6.2 million tonnes, subject to no further significant wet weather and satisfactory rail and port operations. This compares with the pre-flood forecast of 6.0 to 6.5 million tonnes,” Butel said.

Road access to Blackwater remains cut and Curragh is flying in available personnel to site. Queensland Rail has suspended rail operations on the Blackwater line.

“Our best estimate for rail operations returning to normal is mid-January 2011 at the earliest,” he said.

Construction activities associated with the expansion of Curragh to 8.0 to 8.5Mtpa of export coal will resume next week.

Caledon Resources said while force majeure has not been declared at its Cook mine and no significant damage has been sustained, both road and rail access to the nearby Blackwater township and the mine site have been repeatedly closed.

As a result of these disruptions, 2010 sales will now be 543,000t versus a previously advised range of 550,000t to 570,000t.