Australia Coal Mines Shut Ahead of Cyclone

Australia's coal industry is bracing for another blow to exports as a huge cyclone moves toward northern Queensland state, forcing two coal mines, part of the state's coal haulage system and several coal export ports to shut Tuesday.

Queensland, Australia's largest coal-producing state, is still recovering from the floods which brought the state's mining industry to a near standstill and there is a risk that more severe weather could make recovery even more difficult.

Cyclone Yasi, which is expected to rival the strength of Hurricane Katrina, will hit the Queensland coast early on Thursday, following close on the heels of Cyclone Anthony, which soaked parts of the state over the weekend.

Xstrata Coal shut its Collinsville mine and said it was considering shutting its Newlands mine as well, while Rio Tinto shut its Hail Creek mine.

"This is shaping as a much larger and faster moving system, which could impact a wider area in what is an already saturated landscape following Cyclone Anthony," Rio Tinto Coal Australia said in an e-mailed statement.

QR National, Australia's largest coal freight company, suspended operations on its Goonyella and Newlands rail lines that run from inland mines to coal ports.

The country's largest coking coal export terminal, Dalrymple Bay, was also shut due to the cyclone . But the state's second largest coal terminal at Gladstone Port, which lies outside of the cyclone warning area, remained open.

Australia is the world's largest exporter of coal and accounts for two-thirds of world exports for coking coal, which is used for steelmaking.

Severe weather in Queensland has resulted in volatility in coal prices, pushing up prices in the illiquid coking coal spot market and boosting thermal coal prices nearly 30% to over $140/ton in mid-January from about $110/ton at the beginning of 2011.