Rain makes coal heavy, slippery, and harder to excavate. So what does La Niña mean for this already disrupted industry?

As the La Niña weather event wreaks havoc across New South Wales, coal operators are suffering. Australian coal company Whitehaven is among them, last week cutting its production forecast after disruption caused by floods and heavy rains.

The irony of a coal company hit by extreme weather has not escaped some. While it’s hard to know how climate change is affecting this La Niña, evidence suggests flood events will become more frequent and intense as the planet warms.

Climate changes cause problems for many industries and coal is not immune. Wet coal is heavier to transport. And rain can disrupt both mining operations and transportation networks crucial to the movement of coal and miners.

This is all happening as demand for coal increases and pressure mounts for industry to cut production to help tackle climate change. So let’s take a look at what the industry is facing in these turbulent times.

As the La Niña weather event wreaks havoc across New South Wales, coal operators are suffering.
Dave Hunt/AAP

Rain on the Coal Parade

Australia is the world’s second largest exporter of thermal coal, behind Indonesia. Our shipments mainly end up in Japan, India, Vietnam and South Korea.

Thermal coal is burned to produce electricity. Australia also produces metallurgical coal or “coking” used to make steel.

In recent years, extreme weather conditions in Australia have exposed the vulnerability of the coal industry to climate risk.

Research shows that the 2010/2011 Queensland floods affected around 40 of the state’s 50 collieries, costing over A$2 billion in lost production.



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Australia is now experiencing heavier rain thanks to a third consecutive La Niña. Last year it triggered flooding in Queensland which forced the Baralaba North Coal Mine to suspend operations after water affected the mine and access roads. Workers were fired without pay, angering the union.

In NSW’s Hunter Valley, heavy rains in July this year forced the closure of a rail network linking around 40 collieries to the Port of Newcastle. Coal export services were suspended and the disruption drove up coal prices.

Heavy rains are likely to disrupt supply for the remainder of spring and into summer. Last week, Whitehaven said rain and local flooding were affecting production at two open pit mines near Gunnedah in NSW. Roads were cut off as dams and rivers overflowed near the mine, forcing the company to fly personnel to the mine by helicopter.

Rain can bring other problems. Wet coal can slip and spill off conveyor belts as it is being loaded onto ships. And wet coal is heavy, making it more expensive to transport.

the coal train rounds a bend
Australia’s coal industry relies on rail links which can be disrupted in heavy rain.
Dan Himbrechts/AAP

Volatile times for coal

Australian coal exports remain strong. But disruptions due to rain are adding to already volatile times for coal, both here and abroad.

Demand for coal has increased over the past couple of years, for a variety of reasons. The first is the global economic rebound from the COVID pandemic. The second is the rise in gas prices following Russia’s war against Ukraine.

Diesel supply issues and impending crude oil production cuts are also driving demand for coal.

As winter arrives in the northern hemisphere, demand is likely to increase further. The UK, for example, plans to keep coal-fired power stations running this winter, despite a longer-term plan to shut them down permanently by October 2024. Europe.

All of this has pushed up coal prices. Therefore, rain-related disruptions to Australian coal exports could mean lost opportunities for our coal operators.



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At the same time, the coal industry faces headwinds.

Shipping costs have reached new highs. For Australian exporters, China’s ban on Australian coal is a further complication, however this week’s meeting between the two nations’ leaders may have thawed diplomatic ties.

Then, of course, there’s climate change. Coal is the world’s leading source of energy-related carbon dioxide emissions. It is widely believed that we need to move away from burning coal and switch to renewable energy to avoid the worst climate damage.

Many countries still rely on coal for energy security and for use in industrial processes. Coal also supports jobs and provides export income.

In India, for example, the minister in charge of coal production says fossil fuel will play a big role in the country until at least 2040. And a study released last month found that hundreds of coal companies around the world were developing new mines and power plants stations.

So the move away from coal, especially thermal coal, is likely to take time.

wind turbines against the blue sky
It is widely recognized that the world needs to switch to renewable energy.
Russell Freeman/AAP

What does all this mean?

In the near term, while La Niña is around, Australia may struggle to meet its coal supply commitments during the Southern Hemisphere spring and summer.

This is likely to add further headaches to the already struggling energy market.

Wet conditions aren’t the only climate threat to the mining industry. Drought and heat, for example, reduce the availability of water needed to operate mines. And extreme heat can affect equipment, electricity supply and worker productivity.

In the longer term, the outlook for Australia’s coal exports is very uncertain. The Reserve Bank, for example, says Australia’s coal and gas exports would halve at least if big buyers including China, Japan and South Korea meet their climate pledges.

There are many types of coal, and challenges abound in replacing them with cleaner alternatives. Until the transition is complete, coal is among many industries that must adapt to future weather extremes.



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