Economic Costs Growing w Australia Floods

 

Devastating floods in the northeast Australian province of Queensland, inundating an area the size of France and Germany, could cost the economy there more than AUD 6 billion.

Analysts predict the floods, which have affected more than 200,000 people, will cost the economy $6 billion, not including clean-up costs, with mining and agriculture the worst affected

Queensland Premier Anna Bligh, who toured flood-affected regions with Prime Minister Julia Gillard, said the damage bill would be huge.

 

Devastating floods in the northeast Australian province of Queensland, inundating an area the size of France and Germany, could cost the economy there more than AUD 6 billion.

Analysts predict the floods, which have affected more than 200,000 people, will cost the economy $6 billion, not including clean-up costs, with mining and agriculture the worst affected

Queensland Premier Anna Bligh, who toured flood-affected regions with Prime Minister Julia Gillard, said the damage bill would be huge.

”This is without a doubt a tragedy on an unprecedented scale.”

Numerous mining companies operating in Queensland have announced the floods will prevent them meeting supply contracts,

and have declared force majeure, a clause that allows producers to breach supply contracts due to circumstances beyond their control.

The clause is affecting about 65 per cent of the state’s annual coal export contracts.

Queensland’s Bowen Basin supplies about 40 per cent of the world’s coking coal exports.

Wesfarmers said it had been forced to suspend work at its Curragh North mine.

Companies including BHP Billiton, Xstrata, Rio Tinto and Peabody Energy Corp have also said they may not be able to fulfil contracted deliveries.

The state’s resources council estimates that coal and gas companies face hundreds of millions of dollars in lost production from the flood crisis.

Flood damage has also forced the indefinite closure of the port of Bundaberg, where floods began receding but parts of the town remain under water.

People whose homes have been flooded or damaged will be eligible for disaster relief payments of $1000 per adult and $400 per child.

A national relief fund set up for flood victims exceeds $7 million, after million-dollar donations from Origin Energy and the Commonwealth Bank.

Ms Gillard also said the economic impact of the floods, and the cost of the clean-up, would not pose any threat to the government’s plan to return the budget to surplus in 2012-13.

The country’s equal largest domestic insurer, Suncorp, has yet to put an estimate on the likely damages bill it could face.

It said it had received 1450 claims since Christmas Eve, according to the Brisbane Times.