The effects of the floods that have swept across the Australian state of Queensland will be felt way beyond its borders, affecting international coal and steel prices.
Water covering an area the size of France and Germany has destroyed crops, flooded mines and destroyed railway lines and roads.
The mineral-rich northern Australian state supplies more than a quarter of the world's seaborne coal exports and half of the world's coking coal, used in steel making.
Commodity analysts say the spot price for coking coal has already risen from US$225 a tonne to $253. It is expected to rise further as more coal-mining companies in the state declare force majeure, a contractual clause allowing miners to miss delivery deadlines.
The analysts are estimating a sharp rise in second-quarter coking coal contract prices, with some saying the price could go up by between 20 and 25 per cent, which will affect steel prices. With rail networks washed away, dozens of foreign bulk carriers have been forced to queue off ports along the central Queensland coast to be loaded.
Japanese buyers are set to be hurt most with ships capable of taking 2.5 million tonnes sitting off Hay Point and Dalrymple Bay, near the central Queensland port of Mackay, waiting to load, The Australian newspaper reports.
As of Thursday there were 50 ships anchored off the Dalrymple Bay coal terminal, while further south more ships were waiting off the port of Gladstone. So far no Chinese bulk carriers have been reported off any of the major Queensland coal ports.
Economists are predicting the economic hit taken by Australia from the floods could be between A$5 billion (Dh18.23bn) and A$10bn, and knock 0.5 per cent from growth forecasts for the year. Coal is Australia's top export earner, accounting for A$55bn of export revenue annually.
Anglo American and Rio Tinto were the latest miners to cancel coal shipments and declare force majeure. Anglo American has been reported by local media as saying it could take weeks before the floodwaters can be drained from its mines. The company has five coal mines in the Bowen Basin in central Queensland, three of which are flooded, with the other two cut off.
"As rain is continuing to fall in the region and further rains are forecast, Rio Tinto Coal is currently unable to provide an estimate of the full impact of this adverse weather or the duration of the force majeure declaration," a spokesman for Rio Tinto was quoted as saying.
Mines owned by BHP Billiton, Mitsubishi, Peabody Energy, Vale and Macarthur Coal have all declared force majeure. Wesfarmers has suspended mining at its Curragh North operation.
It was reported that coking coal mines with an annual production capacity of at least 80 million tonnes, or about 30 per cent of Australia's coal exports last year, are now under force majeure.
Analysts say North American coal producers will probably fill the gap, despite higher freight costs.
The immediate economic impact was underlined on Wednesday when Macarthur Coal told the stock market to expect lower profits for the first half of the year.
But companies such as Rio Tinto and BHP, among the world's biggest diversified miners, will see only a modest impact on profits.
Shane Oliver, the chief economist at AMP Capital Investors, was quoted by local media as saying he expected the floods would wipe about 0.3 per cent off GDP immediately.
Michael Roche, the chief executive of the Queensland Resources Council, was also quoted in the local media as saying mining companies were bleeding "tens of millions of dollars" in lost production.
The Queensland premier Anna Bligh estimated coal exports worth A$100 million a day were being lost or postponed due to the floods.
Despite forecasts by some miners that they can have operations restarted within weeks of the floods receding, it will take months to rebuild vital rail and road infrastructure that has been destroyed, and to pump water from mines.
The cost of rebuilding will run into billions of dollars, says Ms Bligh.
