(Recast throughout, adds engineering and analyst quotes)
By Jonathan Barrett and Benjamin Weir
SYDNEY, April 7 Global coking coal supplies have
been drastically interrupted by a small stretch of rail that
wraps around a modest-sized Australian mountain range – and
repair crews are unable to find a quick fix.
Australian rail operator Aurizon Holdings Ltd said
on Friday it would take another four weeks to repair the
Goonyella line, which transported 118 million tonnes of mainly
coking coal in 2016 and has been hit by landslides.
The company said that its cyclone-damaged Blackwater coal
haulage line - the second major rail corridor after Goonyella -
would reopen on Monday at reduced capacity.
"Recovery and repairs are being undertaken at multiple sites
along the Goonyella corridor, including at Black Mountain which
experienced significant landslides," Aurizon said.
Multiple landslides and flooding knocked out the rail
network when Cyclone Debbie ripped through the state of
Queensland, a major coking coal region, last week.
The cutoff in exports of the key steelmaking ingredient, has
left steelmakers in China, the world's biggest producer,
scrambling for supplies, even looking as far as the United
States, and pushed up prices.
Queensland accounts for more than 50 percent of the global
seaborne coking coal market, which hit 314 million tonnes in
2016, according to Australia's Department of
Aurizon's note was the first update it has provided to the
market since Monday. It had previously forecast Blackwater to
come back on line this week, while there is no change to the
Goonyella time table.
The much smaller Newlands and Moura rail networks are
expected to be operational next week.
NOT A QUICK FIX
While the return of the Blackwater line will start
replenishing coking coal supplies, the majority of coal in the
region travels on the Goonyella line.
Goonyella wraps around a mountain range en route to port
facilities, where repairs are hampered by risks of further
landslides, while drenched terrain limits how quickly heavy
equipment can be moved into place.
Buddhima Indraratna, an engineering professor specialising
in railway geotechnology, said the trackbeds, known as ballasts,
would have been infected.
"The ballasts are now probably contaminated with landslide
mud and debri; fouled ballast needs to be replaced, or cleaned
and placed again," Indraratna said.
"Any side slopes adjoining the track need to be stabilised
properly so that subsequent sliding is prevented."
The repair work is occuring at the most difficult part of
the almost 500 kms (310 miles) of Goonyella track, where one of
the few nearby access points - the Marlborough–Sarina Road - has
itself been cut due to landslide damage. The state government
has estimated road repairs will take "at least six months".
Aurizon said on Friday it was working on "alternative
routing options" such as moving coal onto the northern Newlands
line or south via Blackwater.
That sets up a potential race to secure any spare capacity
on the alternate routes, with trucking an unlikely viable
option, said independent mining analyst Peter Strachan.
"There may well be some temporary trickle of truck-hosted
haulage, but when you're looking at the tonnes involved that
would be a trickle, they couldn't do with trucks what they can
do with train lines," Strachan said.
(Reporting by Jonathan Barrett and Benjamin Weir in SYDNEY.
Additional reporting by Tom Westbrook and James Regan.; Editing
by Christian Schmollinger and Richard Pullin)