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Factbox - Companies & industries hit by Australian floods
Reuters - Thursday, January 13
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By Michael Smith
SYDNEY - Australia's mining industry has borne the brunt of the economic impact from massive floods in Queensland state, but agriculture, construction, transport, tourism and retail have also been hit.
Following is a list of sectors and companies affected:
COAL MINERS:
Some of the biggest producers have suspended sales contracts and production runs until waters recede.
- Anglo American, Aquila Resources, Vale, Macarthur Coal, Rio Tinto, Wesfarmers and Xstrata own mines in Queensland which are either fully or partially under force majeure, which releases them from supply obligations.
- BHP Billiton declines to disclose how much capacity is subject to force majeure. BHP has a joint venture with Japan's Mitsubishi Development Pty Ltd.
- Peabody Energy, which has annual production capacity of more than 10 million tonnes in Queensland, has declined to specify which of its mines are under force majeure. The firm has cut its 2010 profit forecast.
- New Hope Corp said on Tuesday it had suspended all operations at its Queensland coal mines.
INSURERS
Total flood-related claims are expected to cost insurers around $1 billion but most of this will be met by reinsurance.
- Queensland's biggest insurer, Suncorp Metway Ltd, sees a need for extra reinsurance cover of A$120 million and estimates the cost of claims at between A$70 million and A$90 million. Analysts have cut earnings forecasts for the insurer by a further 10 to 12 percent.
- Insurance Australia Group has received 2,400 claims but said Thursday it was too early to assess damage. Total claims are expected to fall short of A$150 million, according to analysts.
- Shares in QBE Insurance have also fallen on flood concerns. The level of claims received was not yet available.
MINING CONTRACTORS
- Leighton Holdings has halted work on Brisbane's A$4.1 billion Airport Link, the firm's largest infrastructure project. Leighton said the overall earnings impact from the floods would take time to assess.
- Downer EDI said on Wednesday all of the coal mines where it works in Queensland were running and it did not expect much earnings impact.
- Industrea said only one of its mining services contracts was affected, at Cockatoo Coal's Baralaba mine. Industrea said it did not expect a material impact.
- UBS analysts say other mining service contractors exposed to the floods include Macmahon Holdings, Emeco Holdings, and Bradken. Boom Logistics says the wet weather has hit its December earnings.
PORT/RAIL OPERATORS
- Ports and rail operator Asciano said Wednesday floods had shut coal mines and damaged rail lines, warning the revenue forecast for its Pacific National Coal unit was likely to be hit..
- QR National, Australia's largest coal-freight company, said on Thursday it expected to open its Blackwater rail line as early as January 20. The line has been closed since December 27. QR National's Goonyella line is operating at 70 percent of capacity, while the Moura line is set to reopen to all traffic on Thursday, the company said.
AGRICULTURE
Australia's wheat, sugar and cotton exports have been hit by varying degrees. Fertiliser makers may also be hurt.
- Incitec Pivot is exposed on fertiliser sales to farms and ammonium nitrate sales to miners. It was too early to estimate the impact on the group's earnings, a spokesman said. It suspended operations on December 23 at the 220,000 tonnes a year ammonium nitrate plant at Moura, a joint venture with Wesfarmers. The company plans to restart production this week and return to full production by the end of next week.
- Farm chemicals maker Nufarm expects some lost sales in the near term due to ruined crops, mainly cotton and sugar. In the medium term, it sees the improved soil moisture driving strong demand for a number of products.
- GrainCorp, Australia's largest grain handler: floods halted transportation of grains in Queensland last week, but the harvest was already largely complete in that state, which anyway accounts for a small share of national output.
- Queensland Sugar Ltd, Australia's biggest sugar exporter, said it was buying more raw sugar from Brazil and Thailand as floods damage sugar cane crops.
RETAILERS
- Supermarket operators Wesfarmers and Woolworths face some distribution problems. Woolworths said last week about 47 of its stories were affected.
- The Reject Shop shares were halted from trade on Wednesday as it assessed the impact of floods on a distribution centre in Queensland which services 90 of its 211 stores.
- Department store chains Myer and David Jones shut stores in flood-hit areas, local media said.
- Paint manufacturer DuluxGroup has temporarily shut down a factory in Queensland.
- Soft drinks bottler Coca-Cola Amatil warned on January 6 that a wet, cooler summer would affect its earnings.
- Surfwear maker Billabong cut profit forecasts in December due to the wet weather.
TOURISM
Fragile corals and marine life are under threat from floods flushing toxins into the Great Barrier Reef
Queensland Tourism says rain will hurt the industry, with police telling motorists to stay off the roads in premier tourist destinations such as the Sunshine and Gold Coast. Travellers being urged to cancel holidays.
Qantas Airways says no immediate impact on flights
but analysts expect bookings will be affected. Virgin Blue shares have see-sawed on flood-related concerns.
COAL SEAM GAS
Coal seam gas drilling in Queensland's Surat Basin has been halted due to floods.
- Easternwell Group, being acquired by Transfield Services, has ceased drilling in the region. It is drilling wells for Australia's Santos, Malaysia's Petronas and state-run Korea Gas Corp.
- Canada's Savanna Energy says it has two rigs which cannot be reached. Savanna is drilling wells for Origin Energy Ltd and ConocoPhillips.
REFINERIES
- Refiner Caltex expects production to restart on Thursday at its Brisbane refinery, after a rain-related shut-down last week. Return to full output would depend on normal operations resuming at Brisbane port. It estimated the unscheduled shutdown had cost it A$5-10 million.
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