Coal exports threatened by flood, says Swan

Business day Jan 24--THE Queensland coal industry is likely to be one of the biggest economic casualties of the deadly floods that destroyed homes and industry across the state, the Treasurer, Wayne Swan, said.

Farming, tourism, retail and manufacturing also face heavy hits, Mr Swan said in an economic note published yesterday.

''One of the biggest casualties is likely to be our coal exports, with many mines shut down in big coalmining regions like the Bowen Basin, and supply chains severely hampered,'' he said.

Advertisement: Story continues below ''While this will be partly offset by higher prices, the loss of production will be hit much harder.''

Mr Swan said Queensland produced about 80 per cent of Australia's coking coal, which is used in the production of steel.

About 5 per cent of the world's coal supply has been washed out of the market and the damage could take six months to repair, a report published by analysts at the Commonwealth Bank said.

''Coking coal itself contributes around 10 per cent to Australia's exports, and coking coal exports contribute around 2 per cent to GDP,'' Mr Swan said.

The devastating floods have flooded coalmines and damaged the rail network used to get coal to Queensland ports.

The coal hauler QR National, which was sold by the Queensland government late last year, warned last week that reduced volumes over its network meant it would not meet its prospectus forecast.

The company did not provide a dollar estimate of the damage to its bottom line but predicts coal volumes will be down about 20 million tonnes over the first three quarters of the 2011 financial year, returning to normal in the final quarter.

This represents a fall in volume of close to 10 per cent, which based on figures in QR National's prospectus would carve more than $65 million from its 2011 profit.

The big miner BHP, which has eight coalmines in the Bowen Basin, yesterday raised its donation to the Queensland Premier's flood appeal from $1 million to $11 million.

''As a major employer in Queensland and given our large contribution to the Queensland economy, we want to play a leading role in the recovery efforts,'' the BHP Billiton chief executive, Marius Kloppers, said. ''We have increased our donation to demonstrate our support for the state in which so many of our people live and work, and hope that others will also be able to do so.''

BHP has almost 12,000 employees and contractors in Queensland, including at the eight metallurgical coal operations in the Bowen Basin and a mine at Cannington. Nearly 800 BHP staff work in Brisbane.

''As well as our $11 million cash donation, BHP Billiton has announced it will match all employee donations made through the company,'' it said in a statement.