SYDNEY (Reuters) – BHP Billiton (BHP.AX) BLT.L>, the world’s biggest exporter of coal used to make steel, declared force majeure on Wednesday for coal deliveries from its mines in Australia’s Bowen Basin after a cyclone damaged railway lines, disrupting delivery to ports.
BHP has interests in 11 coal mines in the Bowen Basin, with nine operated as joint ventures with Japan’s Mitsubishi Corp. <8058.T> under the BMA name and two in partnership with Mitsui <8031.T>, called BMC.
“BHP Billiton confirms that force majeure has been declared for all BMA Coal and all BMC Coal products as a result of damage caused by Cyclone Debbie to the network infrastructure of rail track provider Aurizon,” the company said in a statement emailed to Reuters.
Force majeure is a commercial term that means a buyer or seller cannot fulfil their obligations because of outside forces. It is typically invoked after natural disasters or accidents.
A critical mountain pass on the railway connecting Australia’s biggest coking coal mines to ports has been hit by landslides and buckled tracks caused by the cyclone, leading to the disruptions.
The line’s operator, Aurizon Holdings (AZJ.AX), said it would take around five weeks to complete all repairs and alternative routes were being considered.
“BHP Billiton continues to assess haulage options to manage access from mine sites to ports and shipments to customers. We continue to monitor and work through the impacts to production and will provide updates over coming weeks and detail in the Operational Review.”
The company is the fourth miner to declare force majeure in the region.
Chinese coking coal futures jumped more than 7 percent on Wednesday to a four-month high amid worries over tighter supplies from Australia.
The spike in Chinese prices followed a 43 percent surge in Singapore-listed futures of Australian premium coking coal over the past two days.
(Reporting by Tom Westbrook and James Regan; Editing by Richard Pullin)
