Reports gauge damaging La Nina summer rain's cost
Date: 11th Apr 2011
THE effects of the summer's La Nina rains on the nation's coal, iron ore and uranium exports will be revealed this week in the first-quarter reports of Rio Tinto and its subsidiary Energy Resources of Australia.
Both are expected to warn that the weather's impact will stretch into the June quarter.
While the headlines about devastating floods have gone, heavy rain continued in Queensland, the Northern Territory and Western Australia throughout February and March, meaning first-quarter production will be hit much harder than even the December quarter.
Rio energy chief Doug Ritchie, who runs the miner's coal and uranium businesses, said rains were continuing in Queensland, with coal production still affected.
UBS analysts are forecasting that even though port and rail infrastructure is mostly up and running after the floods, Queensland's March quarter coal production will be down 15 per cent from the December quarter.
"We would expect Rio Tinto's Queensland coal and West Australian iron ore operations to show reduced production (from the previous quarter)," UBS analyst Glyn Lawcock said.
February export data released last week by the Bureau of Statistics shows hard coking coal exports, mainly from Queensland, slipped by 9 per cent from January and were down 30 per cent from a year ago at 4.9 million tonnes.
UBS said the exports were the lowest in the past decade.
While Rio's Queensland coking coal output is expected to show similar drops, its Hunter Valley thermal coal operations in NSW, run by its Coal & Allied subsidiary, are expected to show only a 10 per cent drop from the previous quarter.
Coal & Allied, which reports on Wednesday, is forecast by UBS to have produced 6.8 million tonnes in the quarter, down 10 per cent from the December quarter but up 20 per cent from a year ago, when the weather in the Hunter Valley played more havoc.
ERA, which reports tomorrow, has the biggest potential to give the market a negative shock, as far as Rio's results go. UBS is expecting a 55 per cent drop in uranium production from the previous quarter to 525 tonnes.
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