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.

soundoff (5 Responses)
  1. Manuel Vilhena

    Horrible floods. Apart from human disasters there are interesting issues behind that.

    January 3, 2011 at 10:02 am |
  2. Pat Kenny

    One would expect a media heavyweight like CNN to get its terminology correct. The nation of Australia (fortunately coincident with the continent of the same name) is a federation of six states and several territories. Queensland is Australia's second-largest state, not a "province", with 13% more land area than the American province of Alaska (whoops! I meant "state").

    BUT that land area should give some idea of the scale of the flooding there. To pick an equivalent piece of the USA, it would be something like Alabama, Arkansas, Delaware, Florida, Georgia, Indiana, Kentucky, Louisiana, Maryland, Mississippi, Missouri, New Jersey, North Carolina, South Carolina, Tennessee, Virginia, and West Virginia combined, all being involved in the bad weather.

    But here in the south, we have lovely sunny weather. Last Friday was 40 deg C (104 deg F). Go figure.

    January 4, 2011 at 2:45 am |
  3. Luckyray

    Keep your heads buried that global warming does nto exist, burn fossil fuels like no tommorow and be ignorant that man's disruption of natural cycles is not the cause

    January 6, 2011 at 5:16 pm |
  4. Miguel mendonca

    The irony that coal production is being affected by problems triggered by coal is, I am sure, largely unreported in Australia. People are dying, a fortune is being lost, and still the nation will deny climate change is a threat. The penny has yet to drop. When the costs of inaction mount year on year, eventually it may be worth doing something about their dirty national export. Apparently lives lost are less important.

    January 11, 2011 at 9:08 am |
  5. Heldrey

    Why does Mr. Obama not release his long-form birth crtaificete? This would prove his natural born citizenship. I understand he has spent over a millon dollar to hide it from the public. It will just cost a few dollars to take a copy and show it to the press.

    November 3, 2012 at 3:39 pm |

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