Cyclone Oswald causes trouble for Queensland miners

THE BOURSE WHISPERER: The recent heavy rainfall generated by ex-tropical cyclone Oswald has caused a great deal of damage across Queensland, which has led some miners to provide updates on its effect on their operations.

Evolution Mining (ASX: EVN) has advised the market the heavy rain and flooding in Southern Queensland has not had a great impact on its operations.

The company closed down mining and processing operations at its Mt Rawdon gold mine, located 75 kilometres south west of Bundaberg, on Saturday 26 January mainly as an exercise in ensuring the safety of its personnel.

The company said its site management team were well drilled for the onset of the wet season.

Evolution anticipates processing to restart later this week depending on access to ongoing supplies of diesel and other major consumables.

Processing will be limited to low-grade stockpiles while dewatering of the open pit is progressed.

It was business as usual at the company’s Cracow gold mine, located 215 kilometres west of Bundaberg.

“Although the extreme weather event will have some impact on production from the Mt Rawdon mine in the current quarter, Evolution Mining remains confident of meeting its FY13 Group production and cash cost guidance of 370,000 to 410,000 ounces gold equivalent at $730 to $790 per ounce,” Evolution Mining said in its ASX announcement.

Yancoal (ASX: YAL), unfortunately, has not been as lucky with both the company’s Yarrabee and Middlemount open cut mines impacted by Oswald.

Yarrabee recorded over 360mm and Middlemount 420mm of rain from the event.

One of the levee banks surrounding the Middlemount Mine was breached and water flowed into the open cut.

Yancoal said the mine operators and management had responded by installing pumping equipment to remove water from the mine.

Production from the mine is likely to be impacted for at least three weeks however the timing on the commencement of coal mining remains uncertain.

At Middlemount the company said it would seek to continue to undertake certain works in areas which are unaffected by the flooding.

Production was suspended at the Yarrabee Mine for a period over the weekend and following an inspection of the mine normal operations are expected to commence this week.

Yancoal does not expect any impact on production for the quarter from Yarrabee.