The aftermath of the big wet in the central Queensland coal fields has again forced Wesfarmers to take the knife to its sales forecast for its rich Curragh coking coal mine.

It is the 5th time at least in 10 months that the company has been forced to cut the sales or production forecasts for Curragh.

Wesfarmers says that production at the Bowen Basin mine continues to be adversely affected by inflows of ground water into the mining areas due to the recent unseasonal rainfall.

In addition, a belt failure on Sunday on the Curragh North Conveyor (which connects that area with the main Curragh processing centre) has also affected production with the equipment offline for at least a week.

Wesfarmers now forecasts metallurgical coal sales volume for fiscal 2011 (ending June 30) to be between 5.1 million and 5.4 million tonnes.

Before Queensland's floods in December and January, Wesfarmers had forecast sales volume of 6.0 million to 6.5 million tonnes.

In the March quarter, Wesfarmers said that coal production for the quarter at Curragh was 1,485 million tonnes, down 37.6% from the previous quarter.

Coking coal production fell 42% and steaming coal production was down 26%.

On current prices, the mine's revenues will be down by close to $300 million because of the lost sales.

"Previous guidance for Curragh metallurgical coal sales volume for the 2011 financial year, provided on 4 April 2011, was at the lower end of the range of 5.8 to 6.2 million tonnes, subject to no further significant impact of wet weather," the company said.

"On 8 April 2011, force majeure was lifted for all export contracts based on the expectation of no further effects of wet weather, and a prompt recovery of operations on-site to full production rates.

"Since this time, heavy rainfall during April and May, as well as groundwater inflow into mining areas, has resulted in overburden spoil becoming super-saturated, causing a number of significant low wall failures in recent weeks.

"Mining areas affected by these low wall failures have seen access to exposed coal restricted, resulting in reduced coal mining rates and slower recovery of operations on-site.

"We are continuing to dewater the affected areas and now expect operations to return to full production from July 2011," Wesfarmers Resources Stewart managing director, Stuart Butel said in yesterday's statement to the ASX.

"We are continuing to de-water the affected areas and now expect operations to return to full production from July 2011".

Wesfarmers shares fell 1.2%, or397c, to $32.71.

Copyright Australasian Investment Review.
AIR publishes a weekly magazine. Subscriptions are free at www.aireview.com.au

More from IBT Markets:
Subscribe to get this delivered to your inbox daily
Follow us on Facebook.
Follow us on Twitter.