BHP Billiton said that its coal mining operations will be impacted due to the heavy rains and floods for the next six months. Production of coal is down to one third of the previous quarter.
In a statement BHP Billiton said that Queensland Coal (Australia) production was significantly affected by the persistent rain and flooding that impacted the Bowen Basin during the period. They also said that the output of coal for the mine dropped 30% versus the previous quarter.
However iron ore output is rising to record levels with a 4% increase in production this quarter. The iron ore demand from China and other Asian countries is driving the current production rate of 144 million tonnes a year for BHP Billiton. The company is barely meeting one tenth of the demand from China alone.
Analysts say that more than $5 billion will come from iron ore for the first half earnings for the Melbourne based company. BHP Billiton is also expected to show underlying earnings of about $10 billion for the half year ending December 31, 2010. While the coal supply and sales may be down due to the floods, iron ore will make fair weather sailing for BHP Billiton.