Australian Mines Face Widespread Disruptions; ASX Fall 2.6% in 2010

Chandrasekhar Atreya
31 Dec, 2010
New York City

Australian benchmark stock index ends the day 1% down and for the year 2010 declined 2.57%. Rain havoc continues in Queensland forcing miners to invoke the emergency clauses for coal supplies. Dalrymple Bay expects to resume export of coal on the New Year day.

[R]6:00 PM Sydney, Australia – Australian benchmark stock index ends the day 1% down and for the year 2010 declined 2.57%. Rain havoc continues in Queensland forcing miners to invoke the emergency clauses for coal supplies. Dalrymple Bay expects to resume export of coal on the New Year day.[/R]

Stocks in Sydney declined after a broad sell-off sparked by heavy rains and widespread disruptions at several mines. Insurers, miners and banks led the decliners as the nation battles with flood and business interruptions.

The ASX 200 Index in Sydney closed 45.2 down or 0.94% to close at 4,745.20 for the day and closed down 2.57% for the year 2010.

The Australian dollar closed at $1.0162 in Sydney, today the last day of the year 2010.

Peabody Energy joined other coal miners in Queensland by declaring force majeure on its coal production in the state affected by flooding which has closed mines, rail lines and ports across the state.

The flood water rose across Australia’s northeast today inundating 22 towns and marooning nearly 200,000 people and also closing one of Australia’s major sugar export ports.

Gladstone Port Corp said today it stopped receiving coal into its RG Tanna Coal Export terminal and may not receive supplies for another week due to rain and flooding.

Resources firm Moly Mines said today it shipped the first iron ore batch produced from its 10 million tons a year Spinifex Ridge mine in Western Australia to Chinese firm Hanlong Metals.

Coal shipments from Dalrymple Bay may resume on the New Year day as supplies started arriving at the port after rail tracks were cleared following a derailment and flooding.

The Goonyella rail line, which brings coal from 22 mines in the state of Queensland, may reopen today, Mark Hairsine, a QR National Ltd spokesman said by phone from Brisbane today.

Yanzhou Coal Mining Co of China said it plans to increase its stake in Yancoal Australia by $909 million, paving the way for a planned listing of the unit in Australia.

Estonia becomes the first former Soviet republic to join the euro on the New Year day, putting a temporary cap on the currency bloc’s expansion as sovereign debt crisis spreads through Europe.

The country, which is wedged between Russia and Latvia, will at midnight tonight become the 17th country to switch over to the euro currency.

The United States Navy has awarded Perth-based Austal Limited and its partner a combat ship contract.

The Australian company and partner Lockheed Martin will each build 10 littoral combat ships, to be delivered by 2015, the U.S. Navy said a statement yesterday. The warships would be built at Austal’s shipyard in Mobile, Alabama.

BHP Billiton and Anglo American joined the list of miners to enact an emergency clause on coal contracts in Queensland.

A spokeswoman of BHP said last night that the mining giant has declared force majeure, which means it can miss deliveries because of circumstances beyond control. Anglo American also enacted the clause after the deluge and the subsequent flooding hampered production, road and rail access at its Callide, Dawson, Foxleigh, German Creek and Moranbah North mines in Queensland.

Stock Movers

In a broad sell-off almost all sectors in the market declined. Banks, miners and retailers led the decliners.

BHP Billiton dipped 60 cents to A$45.25 while Rio Tinto fell 23 cents to A$85.47.

ANZ fell 33 cents to A$23.35, Commonwealth Bank slipped 50 cents to A$50.77, National Australia Bank lost 33 cents to A$23.70 and Westpac dropped 40 cents to close at A$22.21.

Insurers also declined after floods continued to cause chaos across large tracts in Queensland. Insurance Australia Group fell 6 cents to A$3.88 and Suncorp declined 9 cents to A$8.61.