Steel prices fear after Queensland floods

4th Jan 2011 14:21

Catastrophic floods hitting Queensland in Australia could have a long-term impact on the global steel industry, a leading politician warned today.Queensland state premier Anna Bligh issued the warning after three-quarters of the state's coking coal fields shut down because of the unprecedented wet weather.Queensland exports half the world's coking coal, an essential ingredient in the production of steel."We have three-quarters of all of our coal fields unable to operate and unable to supply markets," Bligh told Australian broadcaster ABC. The Queensland Resources Council recently estimated the floods will cost Queensland's coal industry A$1bn (£650m) in lost production.Rio Tinto and Anglo American have already declared force majeure on their coal mining operations in the region, a move that excuses them for missing contractual targets because of outside events. Anglo American is the second-largest exporter of metallurgical coal in Australia and owns two thermal coal mines. Its mines affected are Callide, Dawson, Foxleigh, German Creek and Moranbah North. Rio Tinto declared force majeure on contracts from its coal mines at Hail Creek, Kestrel, Blair Athol and Clermont in Queensland's Bowen Basin. Grain production in Victoria, New South Wales and Queensland has also been badly disrupted with estimates at the crop damage put at between A$1bn and A$2bn.