BRISBANE, Australia, Jan. 17 (UPI) -- Floods in the Australian state of Queensland have wiped out $2.3 billion in coal sales, an industry group says, with analysts reporting that it could take months for coal production to resume.
Since December, about two-thirds of the state, an area twice the size of Texas, has been ravaged byflooding.
Of Queensland's 57 coal mines, 60 percent were operating under restrictions and 25 percent were yet to resume normal production, the Queensland Resources Council said, Queensland's The Courier-Mail newspaper reports.
Queensland accounts for about two-thirds of the world's supply of coking coal, a vital ingredient in steel making. The coal was trading at $225 a ton before the floods and is now at about $250 a ton.
Energy consultancy Wood Mackenzie said that, based on market factors, coal price increases could exceed the rate of the hikes resulting from the 2008 Queensland floods, when the contract price tripled to $300 a ton and the spot price peaked at $400 a ton.
The firm said it was "reasonable" to assume that coking coal prices could end up peaking at $500 a ton because of this flood.
Researcher IBIS World says the shutdown of the Queensland coal chain has created an export shortfall of more than 1 million tons a week.
"The industry could take months to recover from the deluge, with production unable to restart until floodwaters are drained from mine pits and roads, damage to infrastructure is repaired and rail and port access points are restored," IBIS states in an economic impact report on the floods.
"Miners are also expected to be hampered by environmental regulations on water discharges from mine pits and legal issues arising from declaring force majeure on contracts and failing to adhere to strict health and safety standards," the report said.
National Australia Bank, in a report released Monday, said resuming coal mine production could take up to six weeks, depending on the level of flooding and rain.
Based on current prices, the sector's stoppages are estimated to result in about $600 million a week in lost revenue, the bank said.
Australia Greens Party leader Bob Brown said the coal sector's contribution to global warming was responsible for the extreme weather conditions that are causing Australia's floods.
"Burning coal is a major cause of global warming," Brown said. "This industry, which is 75 percent owned outside Australia, should help pay the cost of the predicted more severe and more frequent floods, droughts and bushfires in coming decades."