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Australia’s Newcastle Port, the largest coal port in the world, has been closed since Monday due to severe storms on the east coast of the country.
Heavy rains, flooding and cyclone-strength winds have battered Australia’s coast for three days. So far, three elderly people have been reported dead in the town of Dugong due to rapidly rising flood waters, Deutsche-Welle reported.
“Due to the weather event, no shipping movements occurred yesterday and port operations also paused,” a port spokeswoman told Reuters. “No shipping movements have occurred today.” Seven coal ships are waiting to leave the port, and the news outlet was not able to obtain comment as to how many ships were waiting offshore to pick up cargo.
Since Monday, the price of thermal coal for delivery next month from Newcastle has gone up 10 percent, to $68 per tonne, on the back of delays expected due to the storm.
According to Platts, rail and port companies have said that operations are not expected to resume until Thursday at the earliest. Newcastle’s port harbor master allowed “restricted” vessel movements in the port on Wednesday, but this allowance did not apply to coal ships.
“[T]he rain and winds have eased, but the swell remains high at five meters,” a spokeswoman told the publication, confirming that no shipments had been scheduled for Wednesday.
There has been damage to railroads that serve the port as well. Rail operator Australian Rail Track stated that conditions and access through the region remain difficult, and that crews will be commencing inspections to get a better idea of the damage.
“Damage in the North Coast includes hundreds of metres of ballast washed away at various locations, a number of land slips and damage to signalling equipment,” the company said in a statement. “High rainfall, severe flooding, strong winds, fallen trees and debris, power failures and fallen power lines continue to affect the Hunter Valley network, particularly between Maitland and the port. A number of track locations are under water and full assessment will not be able to be made until water levels recede.”
Australia is one of the world’s top coal-producing countries, and miners such as BHP Billiton (NYSE:BHP,ASX:BHP,LSE:BLT), Rio Tinto (NYSE:RIO,ASX:RIO,LSE:RIO) and Glencore (LSE:GLEN) export through coal terminals at Newcastle.
Platts notes that so far, according to Hunter Valley Coal Chain Coordinator data, roughly 500,000 tonnes of coal cargo has been delayed at Newcastle terminals operated by Port Waratah Coal Services alone.
Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.