April 6, 2017 / 11:45 AM / 8 months ago

Jindal Steel declares force majeure on Australian mine

MANILA/NEW DELHI (Reuters) - India’s Jindal Steel and Power suspended operations at its coking coal mine in Australia last month due to heavy rains caused by Cyclone Debbie, forcing it to declare force majeure, its chief executive said on Thursday.

That makes Jindal Steel, one of India’s biggest steelmakers, the sixth miner in Australia to declare force majeure - a clause typically invoked after natural disasters - on coal shipments after Debbie halted operations, crippling the flow of coking coal from the world’s top supplying nation.

“We couldn’t get the trains, we couldn’t get the power supply and we had damage caused by the storm when the water came into the mine so it was very dislocating,” Ravi Uppal told Reuters by telephone.

“There is non-stop rain. We had to announce a situation of force majeure,” he said.

Uppal said efforts have been underway to get things back on track and the company will resume mining in 14 days.

Jindal Steel produces about 100,000 tonnes a month of coal used in steelmaking from its Wongawilli coking coal mine in New South Wales.

Uppal said the company was receiving inquiries from Chinese and Japanese clients to whom they sell part of the output from the mine.

Top coking coal shipper BHP Billiton and Glencore are among other miners who have declared force majeure on shipments from Australia’s Queensland state after landslides caused by Debbie hit a critical mountain pass on the railway connecting to ports.

The line’s operator, Aurizon Holdings, said it would take around five weeks to repair the worst-hit parts of the network and alternative routes were being considered.

Queensland accounts for more than half of global seaborne coking coal supplies, with prices rising on fears that stockpiles held by steelmakers will start to run down.

Jindal Steel is looking to plug any gap in coal supply from another mine in Mozambique which produces about 250,000 tonnes a month, Uppal said.

“The Australian mine should be able to resume relatively soon and things will go back to normal. This whole thing happened unexpectedly and it can’t last very long,” he said.

Reporting by Manolo Serapio Jr. in Manila and Neha Dasgupta in New Delhi; editing by Jason Neely and David Evans

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