As storm clouds break, London Calling gets biblical: a plague of floods, crocs, and ultimate darkness?
Sometimes “natural events” do more to dent a company’s share price than criticisms by campaigners at a shareholders annual general meeting. That was certainly the case with Rio Tinto, as huge floods have devastated Queensland over the past three weeks, wreaking massive damage on peoples’ homes, crops and thoroughfares.
The downpour also disrupted  output of coking coal from the world’s most important single source of this dark material, compelling producers to declare force majeure on their existing contracts.
Australia meets around two thirds of global demand for sea-borne coking coal – making up for the lack of it in other countries, even if they are rich in the thermal variety. That’s a staggering percentage in itself. But equally, if not more significant, is that the majority of this coal lies in just one sprawling deposit, Queensland’s Bowen Basin.
Although a significant number of companies dig up this black stuff (including Aquila Resources, Macarthur Coal, Vale and Wesfarmers) there’s no question which of them hold the power in this critical market sector. They are four of the world’s biggest eight mining companies: Australia-UK’s BHP Billiton and UK-Australian Rio Tinto lead the way, followed by London-listed Anglo American and UK-Swiss based conglomerate Xstrata.