Australian floods hit global economy
Source: Agencies |
January 6, 2011, Thursday
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AUSTRALIA'S record floods are causing catastrophic damage to infrastructure in the state of Queensland and have forced 75 percent of its coal mines, which fuel Asia's steel mills, to grind to a halt, Queensland's premier said yesterday.
The worst flooding in decades has affected an area the size of Germany and France, made towns into islands in an inland sea, ravaged crops, cut transport links to ports, slashed exports and forced up world coal prices.
"Seventy-five percent of our mines are currently not operating because of this flood, so that's a massive impact on the international markets and the international manufacture of steel," Premier Anna Bligh said.
The Australian floods, which have cut off a total of 22 towns, have been caused by a "La Nina" weather pattern, which produces monsoonal rains over the western Pacific and Southeast Asia.
The "La Nina" saw Australia record its third wettest year on record in 2010 and is expected to last another three months, the nation's weather bureau said yesterday.
Queensland state is currently the world's biggest exporter of coal used in steel-making.
"Queensland is a very big state. It relies on the lifelines of its transport system, and those transport systems in some cases are facing catastrophic damage," said Bligh.
"Without doubt this disaster is without precedent in its size and its scale here in Queensland. What I'm seeing in every community I visit is heartbreak, devastation."
The flood disaster, say analysts, is forecast to shave around 0.4 percentage points off the country's gross domestic product, which equates to just over A$5 -billion (US$5.01 billion) of -Australia's annual output of A$1.3 trillion.
Australia accounts for more than half of global coking coal exports, which are vital to steel makers, -especially in Asian countries such as booming China.
The floods have hit mines which produced 35 percent of Australia's estimated 259 million tons of coal exports in 2009. An estimated US$1 billion has been lost in coal production, said the Queensland Resource Council.
Australian stocks fell 0.6 percent to a one-month low yesterday, with shares in global miners BHP -Billiton and Rio Tinto losing ground and major financial institutions such as Commonwealth Bank falling on concerns about their exposure to -affected companies.
The Australian dollar also slipped back towards parity with the United States currency, after shedding 1.2 percent the previous day.
The worst flooding in decades has affected an area the size of Germany and France, made towns into islands in an inland sea, ravaged crops, cut transport links to ports, slashed exports and forced up world coal prices.
"Seventy-five percent of our mines are currently not operating because of this flood, so that's a massive impact on the international markets and the international manufacture of steel," Premier Anna Bligh said.
The Australian floods, which have cut off a total of 22 towns, have been caused by a "La Nina" weather pattern, which produces monsoonal rains over the western Pacific and Southeast Asia.
The "La Nina" saw Australia record its third wettest year on record in 2010 and is expected to last another three months, the nation's weather bureau said yesterday.
Queensland state is currently the world's biggest exporter of coal used in steel-making.
"Queensland is a very big state. It relies on the lifelines of its transport system, and those transport systems in some cases are facing catastrophic damage," said Bligh.
"Without doubt this disaster is without precedent in its size and its scale here in Queensland. What I'm seeing in every community I visit is heartbreak, devastation."
The flood disaster, say analysts, is forecast to shave around 0.4 percentage points off the country's gross domestic product, which equates to just over A$5 -billion (US$5.01 billion) of -Australia's annual output of A$1.3 trillion.
Australia accounts for more than half of global coking coal exports, which are vital to steel makers, -especially in Asian countries such as booming China.
The floods have hit mines which produced 35 percent of Australia's estimated 259 million tons of coal exports in 2009. An estimated US$1 billion has been lost in coal production, said the Queensland Resource Council.
Australian stocks fell 0.6 percent to a one-month low yesterday, with shares in global miners BHP -Billiton and Rio Tinto losing ground and major financial institutions such as Commonwealth Bank falling on concerns about their exposure to -affected companies.
The Australian dollar also slipped back towards parity with the United States currency, after shedding 1.2 percent the previous day.
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