SYDNEY--Xstrata PLC's (XTA.LN) Australian coal unit Tuesday
declared force majeure on several coal shipments that had been due
to leave Queensland state after rail links were shut because of
heavy flooding.
Coal miners across the resource-rich state had earlier reported
disruption to production and transportation of the commodity after
torrential rain devastated the region in the wake of the remnants
of tropical cyclone Oswald. Declaring force majeure frees Xstrata
Coal from liability for failing to make the deliveries as a result
of the unexpected disaster.
"We have declared force majeure on a number of coal export
vessels from the Port of Gladstone, as a result of flood damage to
the Blackwater rail system," a spokesman said in an emailed
statement.
Xstrata is the world's largest exporter of seaborne thermal
coal, used to generate electricity, and one of the largest
producers of coking coal, used in steel.
"We are monitoring the situation and are in close contact with
Aurizon, the network operator," he added, declining to elaborate
further on how many contracts were involved and their size.
Aurizon, Australia's largest rail freight company, said heavy
rainfall had forced it to close its Blackwater and Moura rail
lines, which transport coal from over a dozen mines in the state's
south to the major coal exporting port of Gladstone and nearby
refineries.
Crews were assessing the damage and working to get the lines
running again, the company added. Xstrata Coal earlier said it was
looking at "contingency plans' following the closure. That could
include finding alternative routes to get its coal to port, or
stockpiling material.
Still, coal production wasn't "materially affected" by the
storm, the company spokesman had said.
Other coal miners, including Yancoal Australia Ltd. (YAL.AU) and
Anglo American PLC (AAL.LN), also reported disruptions due to
flooding, along with the road and rail closures.
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