Insurers, Industries Affected by Australia’s Floods

By | January 11, 2011

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:


The Insurance Council of Australia, representing general insurers, says early estimates show insurers may pay out $150 million from 4,300 claims received, but this estimate was made before flash floods hit Toowoomba and raced toward Brisbane.

  • Queensland’s biggest insurer Suncorp Metway Ltd has received 2,500 claims so far from Queensland floods, while Insurance Australia Group has received 900 claims, including those from a tropical cyclone.
  • Shares in QBE Insurance have also declined on concern about the impact of flood claims, although the level of claims received was not available.


  • 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 company cut its 2010 profit forecast last week, citing the flood damage in Australia.
  • Coal producer New Hope Corp said on Tuesday it had suspended all operations at its Queensland mines.


  • Contract mining work accounts for about 6 percent of Leighton Holdings’ revenue. The world’s top mining contractor said it was too early to tell what impact the mine stoppages would have on its revenue and earnings. Not all work has stopped at its operations in Queensland, a spokesman said.
  • UBS analysts say other mining service contractors exposed to the floods include Macmahon Holdings , Boom Logistics , Emeco Holdings , Industrea and Bradken .


  • QR National , Australia’s largest coal-freight company, has closed two rail lines servicing coal mines in Queensland. Parts of its Blackwater rail line are underwater, while it said on Tuesday a line servicing mines northwest of Brisbane had been closed.
  • Australia’s Dalrymple Bay Coal Terminal said on Monday it continued to get about 200,000 tonnes per day of coal into the port. Gladstone Port Corp said Monday it has not received any coal supplies for export since early last week due to disruptions. Both ports had no updates on Tuesday.


Australia’s wheat, sugar and cotton exports are expected to be hit by flooding, while fertiliser makers may also be hurt by reduced sales.

  • 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 Dec. 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, depending on road access to Bowen Basin coal mines, a spokesman said.
  • 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.


  • Supermarket operators Wesfarmers and Woolworths face logistical issues getting produce into affected areas, according to local media. Woolworths said last week about 47 of its stories were affected.
  • Soft drinks bottler Coca-Cola Amatil warned on Jan. 6 that wet weather and a cooler summer would affect its earnings.
  • Surfwear maker Billabong cut profit forecasts in December due to the wet weather.


  • Fragile corals and marine life are under threat from floods flushing toxic sentiment 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.


  • 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. The company 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 .

(Additional reporting by Sonali Paul in MELBOURNE, Narayanan Somasundaram in SYDNEY and Rebekah Kebede in PERTH; Editing by Lincoln Feast)

Topics Carriers Flood Agribusiness Australia

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