Heavy Rains Hamper Mining in Australia; Index Down 1.65%

Chandrasekhar Atreya
30 Dec, 2010
New York City

The benchmark index in Australia closed fell 1.65% in the year. A surge in commodities and energy prices lifted the dollar for the eighth day in a row and touched high last seen in 1982. Several mines in Queensland are forced to close production as rains and flooding hamper activities and life

[R]6:00 PM Sydney, Australia – The benchmark index in Australia closed up 1.65% in the year. A surge in commodities and energy prices lifted the Aussie dollar for the eighth day in a row and touched high last seen in 1982. Several mines in Queensland are forced to close production as rains and flooding hamper activities and life.[/R]

The optimistic outlook for the Australian exports and rising commodities prices was reflected in the dollar. The Aussie traded above the U.S. dollar parity and reached a high last since 1982.

The eight day rally in the Aussie dollar as the year draws to a close only indicates the prospect of higher commodities prices in the months to come.

Chinese economic growth no sign of abating and precious metals are trading at a 3-decade high, copper is a record high and coal and crude oil prices are near highs last seen in 2008.

The ASX 200 Index gained 0.32% or 15.20 to 4,790.40 and the index fell 1.65% for the year.

The Australian dollar held on to an eight-day gain against the greenback, the longest rally since March 2009. The Australian dollar closed at $1.0174 in Sydney, after touching $1.0198, the highest since July 1982.

A tropical depression that could develop into a cyclone could hit offshore oil and gas installations and iron ore shipping zones in the Pilbara iron ore region, the Bureau of Meteorology said Thursday.

Wesfarmers announced today it has suspended operations at its Curragh North mine due to extensive flooding in Central Queensland.

Anglo American Metallurgical Coal said today that it declared force majeure clause on its coal mines in Queensland State due to prolonged and heavy rains.

Rio Tinto also called a force majeure on coal sales contracts from mines in Queensland in which it has majority interest.

Cockatoo Coal said it called a halt to production at its Baralaba mine as the pits were all flooded due to heavy rains in Queensland.

A new chief has been appointed by the Queensland government to coordinate the recovery effort after the state’s unprecedented flood crisis. Emergency Management Queensland chief Bruce Grady has been appointed State Recovery Coordinator under the new Disaster Management Act which came into effect on November 1.

Grady will coordinate recovery operations for flood-hit communities, ensuring they receive the support and services needed to get back to normal life.

Australian consumers may face shortages of fruit and vegetables due to the unprecedented floods in Queensland, but farmers say it’s too early to say how bad the crop is likely.

“It’s not necessarily all doom and gloom and supplies will depend on how the weather pans out,” told National Farmer’s Federation President Jock Laurie APP on Thursday.

Woodside Petroleum confirmed today its selection of two teams of international contractors to undertake the $30 billion Browse liquefied natural gas project in Western Australia.

Stock Movers

BHP Billiton closed up 40 cents to A$45.85 and rival Rio Tinto gained 22 cents to A$85.70 despite reporting production problems at Queensland coal mines due to flooding.

Newcrest Mining gained 29 cents to A$41.00 after spot price of gold reached a three-week high of $1,414.50 per ounce in the local market.

Banks were weak overall, with Westpac losing 10 cents to A$22.61 and ANZ losing 5 cents to A$23.68. National Australia Bank was the only major bank to gain and closed one cent higher at A$24.04. Commonwealth Bank was unchanged at A$51.27.

Despite flooding at its Baralaba mine in Queensland shares in Cockatoo gained one cent to A$0.53.

Among the retailers Woolworths was up 20 cents at A$23.70 and Coles owner Wesfarmers gained 7 cents to A$32.30.