Australian storms ease, but mining disrupted
Source: Reuters
CANBERRA, Jan 5 (Reuters) - A large storm front battering Australia's southwest continued to disrupt mining operations on Friday for the country's two largest nickel producers, BHP Billiton <BHP.AX><BLT.L> and Minara Resources <MRE.AX>, as flooding swept local communities. Gale winds and heavy rains, caused by the tail of a tropical cyclone linking up with a powerful Southern Ocean storm, hit the southern coast of Western Australia overnight, causing flood damage to the town of Esperance and surrounding region. Described by authorities as a "once in a generation" storm, the front was easing on Friday after dumping 220 millimetres of rain, but fallen trees and flooding closed many roads. BHP Billiton's workforce at its Ravensthorpe nickel project, scheduled to go into service in 2008, remained at token levels, while mining operations at the Mt. Keith and Leinster nickel mines were closed until the ground dried out. "Given the rain it's not safe for us to operate at the moment," BHP spokeswoman Emma Meade said, adding that the company's concentrators continued to run. "It's just really the mining side that's been impacted due to safety reasons," she said. Large trucks and mining machinery were unable to operate on the drenched ground. The Mt. Keith and Leinster mines produce about 87,000 tonnes of nickel a year, or about 6 percent of world mine output. The Ravensthorpe smelter project has already been hit by delays and cost overruns topping A$1 billion ($787 million). Nickel prices have been at record highs on the back of demand from China, and were trading around $34,000 a tonne on Friday on the London Metal Exchange, up from $13,500 a tonne in last January. Minara, Australia's second biggest nickel producer, had also halted mining operations at its Murrin Murrin site, but expected them to resume within days. "The plant is still operating. They've got about four months stockpile of high-grade ore. They reckon the mine should have dried out enough for mining to start over the weekend again," spokesman Willie Rowe said. "It hasn't affected production at all." Australia's Bureau of Meteorology said the front would start to weaken as it moved south, away from the coast. "I would think that by the latter parts of the morning the warning should be lifted from the south-east coastal area," spokesman Gary Boterhoven told local radio. ($1=A$1.27)
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