January 3rd, 2011
05:11 AM GMT
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(CNN) – The damaging floods that have hit northeastern Australia and so far killed one person are having a broad knock-on effect on the world’s coal and steel markets.

Queensland, the state hit by the deluge, is one of the world’s largest suppliers of coking coal, a crucial element for the steelmaking industry.

In the wake of the floods, Rio Tinto, BHP Bilton, Anglo American and other miners have declared force majeure, a clause used if the companies can’t meet their contractual obligations due to an “act of God.”

The Australian newspaper cites a Macquarie Group report saying the floods could trigger a worldwide shortage of steel. Spot price for coking coal, now around $246 a ton, is heading toward $300 a ton, the report said.

AMP chief economist Shane Oliver told the Herald Sun that the floods could wipe away 0.5 percent of the nation’s GDP due to disruptions to the coal, sugar and wheat production.

Cost of the floods to the economy are currently estimated at A$6 billion (U.S.$6.12 billion), but that could change – flood waters aren’t expected to peak until later this week.

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