"“We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.” "

Chinese premier Wen Jiabao 12th March 2009

""We have a financial system that is run by private shareholders, managed by private institutions, and we'd like to do our best to preserve that system."

Timothy Geithner US Secretary of the Treasury, previously President of the Federal Reserve Bank of New York.1/3/2009

Friday, February 08, 2008

Floods wreak havoc in Queensland coalfields - global coal prices shift up a gear

The flooded Ensham mine in Queensland.

The coal industry is worth more than Aus$18 billion a year to Queensland's economy and employs about 23,000 people in the state. Floods in January have caused major and massive problems - Coal giant Xstrata lost production at its Collinsville and Newlands mines, BHP Billiton has been forced to cut back production at different sites. Rio Tinto said production at its Kestrel mine had been hit.

Ensham Resources Pty Limited, is one of Queensland's largest and fastest growing thermal coal producers, they built the world's second largest dragline at their Emerald mine in the coal-rich Bowen Basin in central Queensland. It is a major source of coking coal for the steel industry.

Industry sources say that prices at the end of 2007 of US$ 95-US$100 pe tonne can be expected to rise to US$150 a tonne, as supplies are hit not only by flloding of mines but disruption to rail services to the coast.

On top of this, it is apparent that China's severe winter will impact on demand and consequently on already record global prices.

The bucket attached to the new Ensham dragline is of 143 cubic yard capacity - it can scoop out enough material to fill two backyard swimming pools in one go.

Now the dragline is in it's own swimming pool.

"It's really a scene of utter devastation", says Peter Westerhuis general manager of the mine, "the Ensham mine has got the Nogoa river running almost through the middle of it. It's burst it's banks and engulfed the entire centre of operations. The pits are up to a hundred metres deep, and the ones that have been completely inundated are about three kilometres long each, and full of water. We estimate a hundred thousand megalitres has gone into those pits.

"We had some indication of rising flood levels in the Theresa creek, which feeds into the Nogoa river. Literally, twenty four hours later we were faced with this devastation.

The Queensland Resources Council says it could be weeks before the mining industry returns to normal production after the widespread flooding through the central highlands at a cost to the industrysaid to be over Aus$200 Mn.

"The mine is constructed with levees in appropriate places. They are classified as levees suitable for a one in a hundred year flood, in excess of anything that's happened here before. But the flood levels have gone completely over the top of the levee, it's really an unprecedented, and unexpected event that no one could predict." (Just compare the size of this mutha with the pic at the top)

Might be an idea to send details of this to the boffins at the bank of England ... perhaps if they had read about the storms in Newcastle in June they might have been ready to forecast the rise in world coal / energy prices. Saturday, June 09, 2007 Chinese Coal carriers grounded off newcastle,NSW, Australia

and ...

Newcastle Coal Trades Near a Record as Demand Rises (Update1)

Dec. 31 2007 (Bloomberg) -- Coal prices at Australia's Newcastle port, a benchmark for Japan, South Korea and Taiwan, traded near a record on concern that demand is outpacing supply.
Power station coal, excluding shipping cost, for delivery within three months posted its second weekly gain, settling at $89.69 a metric ton in the week ended Dec. 28, according to the globalCOAL NEWC Index, an Asian benchmark calculated each Friday. Prices are up 85 cents from the previous week and near the US$89.76 record set earlier this month (nbspNEWC Index up from US$67.72 in September).

``It's going to be a situation of restricted supply throughout 2008, so that will keep spot prices near record levels,'' said Gavin Wendt, a senior resources analyst at Fat Prophets Funds Management in Sydney. ``The miners just can't get the stuff out and onto a ship.''

The queue of ships waiting outside Newcastle port to load coal reached a record 79 in June after storms disrupted operations. There were 34 vessels waiting to load as of midnight, Dec. 30.

Chinese coal imports rose 39 % to 46.68 million tons in the first 11 months of 2007.

Must be very difficult to calculate global energy price trends faced with that sort of information. Evidently judged by the performance of the wankers at the Bank of England.

UPDATE Midnight : The FT has just hit the streets ....

Wheat price surge raises inflation fears By Chris Flood in London
A fall in US inventories of wheat to a 60-year low drove prices of the grain sharply higher on Friday to a fresh record, intensifying fears of rising global food price inflation.

US wheat futures jumped by their daily trading limit every day this week. Prices for benchmark flour making Minneapolis , (MGEX) rose 10.7 % on the week, extending its price surge since the beginning of 2008 to 50%.

To cope with the raised prices MGEX Contracts Committee approved raising wheat contract daily price limits from 30 cents to 40 cents effective with the Feb. 12 trading session.

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