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Another for you all to read if your intrested. Coking coal spot price was $270.00 last week and is still on the move currently with more to come say analysts. Read the article below

Lost coal production tops $2b in Qld flood
11/01/2011 5:29:59 PM
ShareQueensland's floods are wreaking havoc with the state's coal producers, with the estimated cost of lost production topping $2 billion.Ratings agency Moody's says Queensland has lost eight to 15 million metric tonnes of trade as open-cut pits flood and transport routes are cut off.

UBS resources analyst Tom Price says that quantity will be difficult for the industry to recoup."If the rain stops now... it will take two to three months just for the industry to get back to its regular production," Mr Price told AAP.Mr Price on Tuesday put the possible cost estimate of lost production at about $2 billion. New Hope Corporation Ltd became the latest miner to suspend operations at both of its Queensland mines on Tuesday, joining some of the world's largest majors, which have already shut down production.

New Hope said on Tuesday it has ceased production at its New Acland open-cut mine in the Darling Downs, 150 km west of Brisbane, after flash floods swept through the region on Monday.At the entrance to the Darling Downs in Toowoomba, eight people are confirmed dead while whole families are still missing after a wall of water ripped through the town.New Hope's New Oakleigh mine site is 23 km west of Ipswich, an area that is expecting water levels not seen since devastating floods in 1974. Queensland is the world's largest metallurgical coal export region, supplying 120 million tonnes a year of metcoal, which is used to in steel furnaces.

The rain deluge has left overseas buyers scrambling to find replacements.Mr Price said the market shortfall would certainly impact prices during upcoming contract negotiations in February and March. "What's changed for our forecast is the scale of the rain and flooding," Mr Price said."We knew it was going to be bad but not this bad." Stock Resource managing director Grant Craighead said there was a reasonable chance coking coal prices would rise beyond $US300 per tonne, testing record levels set in 2008.

Coking coal sold for $US270 per tonne on spot markets last week, Mr Craighead said.

"The market is already tight for coking coal and so it doesn't have any slack in the system for further disruptions," he said. US coal producers are already rushing to fill the void, with buyers willing to pay higher prices. However, Australia's Resources Minister Martin Ferguson said it was inappropriate to put a figure on potential losses from stalled coal production. Mr Ferguson said Australian companies would not necessarily lose long-term market share because it would be tough for competitors to bring on additional supply.

"I've seen floods occur in some of these mines over the last couple of years - the recovery can be quick," Mr Ferguson told reporters in Canberra. "You can't make a proper assessment at the moment as to how quickly they can remove the water from the mines," he said on Tuesday. Once the floods started to subside assessments would be made on how mines and rail infrastructure had been affected, Mr Ferguson said.

In Queensland, mining giants Rio Tinto Ltd and Macarthur Coal have both declared force majeure, a contractual clause giving companies the ability to miss deliveries due to circumstances beyond their control. Wesfarmers was forced to suspend operations at its Curragh North mine due to flooding in Central Queensland, while Cockatoo Coal Ltd expects production at its Baralaba mine to be delayed for several weeks.

Whitehaven Coal Ltd was the first to warn investors of an earnings downgrade, after it was forced to buy coal because wet weather had affected its operation, in northern New South Wales. NSW producer Gloucester Coal Ltd said on Tuesday its coking coal operations in northern NSW have not been affected and it continues to expand, despite above average rainfall.

Qld produces 120 tonnes of metcoal each year and about 60 million tonnes, or around 30 to 40 per cent, of the nation's thermal export coal.

GB