AusRAIL, Market Sectors

Queensland floods to slash mining output

The Queensland flooding will likely cut the value of coal exports by as much as $2.5bn and agricultural production by at least $500m.

By Sineva Toevai and Jennifer Perry

The Queensland Resources Council (QRC) estimates that about 15% of the state’s coal mines are in full production, with 60% operating under restrictions and a further 25% yet to resumes to normal operations.

At full production, the coal industry is worth $8.5 million a day to Queensland taxpayers through royalties paid to the state government,” QRC chief executive Michael Roche said.

Queensland’s coal exports could be 15mt lower than previously anticipated for the December 2010 March 2011 period, according to the initial assessment of the flood-stricken state by the Australian Bureau of Agricultural and Resource Economics and Science’s (ABARES).

However, coal prices could settle at higher levels partially offsetting the adverse impact on coal industry revenues, the report said.

ABARES also anticipates that the floods will have a significant impact on the eastern state’s production of fruit and vegetables, cotton, grain sorghum and some winter crops.

ABARES deputy executive director Paul Morris said the value of lost infrastructure would probably be much greater than the estimated production impact.

“There will be significant hardship for individuals and businesses [that] have experienced substantial crop or livestock losses and damage to their property,” Morris said.

Roche praised the efforts of both the state government and coal rail network owner QR National in supporting the coal industry’s recovery.

“QR National has restored the Moura line to Gladstone and we are hoping for similar good news for the Blackwater system later this week,” he said.

“However, it is also clear that the restoration of rail services to mines west of Brisbane and in the Surat Basin are going to take much longer.”

ABARES will release another floods impact on commodities report on February 15.