Australia Struggles to Resume Coal Exports

Chandrasekhar Atreya
04 Jan, 2011
New York City

The benchmark index in Australia closed flat on the first day of trading. Losses mount and coal supplies remain disrupted as floods wash rail lines in Queensland. The new Australian Consumer Law is expected to streamline disclosures. Manufacturing activity softened in December.

[R]6:00 PM Sydney, Australia – The benchmark index in Australia closed flat on the first day of trading. Losses mount and coal supplies remain disrupted as floods wash rail lines in Queensland. The new Australian Consumer Law is expected to streamline disclosures. Manufacturing activity softened in December.[/R]

Stocks in Sydney started the first trading day of 2011 on a positive note but began to weaken in the afternoon and closed lower as insurers and banks declined.

The ASX 200 Index lost 0.06% or 2.70 to 4,742.50.

The Australian dollar was slightly lower in a quiet trade and closed at $1.0096 in Sydney today.

Coal exports worth billions are disrupted by rains that continue to flood mines and wash away rail lines in vast areas of Queensland that produces almost two thirds of world’s coking coal.

Rail lines linking mines to ports have been washed away leading to stagnation of ships anchored for loading. Yesterday 49 ships were anchored off Dalrymple Bay coal terminal while further south another fleet stayed anchored waiting for berth in the Port of Gladstone.

The Australian Consumer Law came into effect on the New Year day replacing about 20 Commonwealth, state and territory consumer protection laws, the Weekend Australian said.

The Australian Consumer Law, which the Productivity Commission estimates will provide up to A$4.5 billion in benefits to the economy, will include terms to cover standard form contracts, a national product safety rules, a national law guaranteeing consumer rights when buying goods and services and enforcement powers.

Manufacturing activity softened in December following a stronger Australian dollar and a weak domestic demand, according to a survey.

The PMI survey conducted by the Australian Industry Group/PWC Australian Performance of Manufacturing Index showed that even though nine of the 12 manufacturing sub-sectors expanded, the index fell 1.3 points to 46.3 in December due to drop in the clothing and footwear, textiles and wood products and furniture sub-sectors.

Wesfarmers Resources said mining at its Curragh coal mine is slowly returning to normal after flood water started receding from Saturday.

“We have quite a bit of dewatering to undertake as a result of the unprecedented rainfall experienced in December 2010,” said the company’s Managing Director Stewart Butel today.

South Korean government said today it will develop rare earths in Vietnam and Australia. Kyrgyzstan and South Africa in 2010 and also cooperate with Japan for development of these minerals overseas.

Texas-focused Challenger Energy confirmed outstanding gas intersections at its drilling in Triple Crown prospect across 45,000 acres in Texas.

“Considering we are drilling with relatively heavy brine, the level of the gas shows is outstanding,” said Managing Director Paul Bilston in a statement today.

Stock Movers

Insurers declined as losses mount related to flooding in Queensland while the materials sector held up well on the back of strong metal prices, particularly copper, which has gained nearly 21% since mid-November.

Suncorp Group dipped 3% or 26 cents to A$8.35 and QBE fell 2.09% or 38 cents to A$17.77. IAG slipped 1.55% or 6 cents to A$3.82.

Coal stocks held well despite flooding-led production losses as coal prices rose due to tighter supplies.

Whitehaven Coal gained 2.39% or 16 cents to A$6.88 while New Hope Corp added 7 cents to A$4.92.

Newcrest Mining was higher by 7 cents to A$40.51.

BHP Billiton gained 0.44% or 20 cents to A$45.45 while rival Rio Tinto added 33 cents to A$85.80.

Among bankers National Australia Bank was the only one to gain 0.59% to A$23.84. Commonwealth Bank of Australia fell 0.59% to A$50.47, ANZ fell 0.39% to A$23.26 and Westpac lost 0.41% to A$ 22.12.