SYDNEY—A crippling drought in eastern Australia is threatening production of commodities from coal to gold, sparking a scramble by companies for water to keep their operations going.
The affected mines and processing operations are in arid regions a hundred or more miles inland of most of the areas hit by unprecedented bush fires. The severe drought conditions are expected to persist despite rain falling or forecast in the region in coming days.
Eastern Australia is a major supplier of metals and minerals to global markets, with more coal leaving its ports for customers in Asia than anywhere else in the world.
Some mines are struggling more than others, with those that rely on river water released from dams to run their operations especially hard hit. Affected volumes are small so far, but they could grow if the drought doesn’t break and competition for water intensifies.
In a highly unusual move, some executives want to pump out historic mines that flooded when production ceased as authorities restrict river water supply in favor of towns and cities. Others are tapping stores of groundwater deep below the Earth’s surface or paying for road tankers that can bring in water from afar.
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