Queensland Tackles ‘Biblical’ Floods, Faces More Rain

By Robert Fenner

Jan. 3 (Bloomberg) -- Australia’s Queensland state is tackling floods that have cut off towns and shut down mines as further heavy rain is forecast to fall on affected regions in the center of the nation’s third-most populous state.

“Severe thunderstorms are likely to produce damaging winds, very heavy rainfall, flash flooding and large hailstones,” the Bureau of Meteorology said on its website. Rockhampton, home to more than 75,000 people about 500 kilometers (300 miles) north of the state capital, Brisbane, is cut off from road, rail and air links as the nearby Fitzroy river swells.

Towns across Queensland in Australia’s northeast have been evacuated as flooding spreads over an area the size of France and Germany combined. The disaster, which has affected 200,000 people, is of “biblical proportions” with the state facing the cost of rebuilding damaged infrastructure and the loss of income from mining and tourism, Treasurer Andrew Fraser said.

Weeks of rain destroyed cotton crops, halted coal deliveries, shut mines and prompted BHP Billiton Ltd., Xstrata Plc, Rio Tinto Group and Peabody Energy Corp. to declare force majeure, a legal clause allowing them to miss contracted deliveries.

Missed Royalty Payments

In addition to the rebuilding cost, the state will miss royalty payments from those mines, with Fraser estimating it may take three months for some to resume normal production.

Queensland, which accounts for about 20 percent of Australia’s A$1.3 trillion ($1.3 trillion) economy, expects the impact on the state’s finances to eclipse the A$800 million it spent on natural disasters last year, Fraser said on Jan. 1.

“We are urging everyone to stay clear of all flood waters,” Rockhampton Mayor Brad Carter said in a statement yesterday. “This is a major flood event and given the predictions it’s important that residents act now and not be complacent.”

One person died and two were missing in separate incidents with the body of a 41-year old woman found after her car was swept into a river at Burketown in the state’s northwest, the Courier Mail newspaper reported yesterday citing police.

Rescuers have stopped looking for a missing swimmer in the Fitzroy river while a search is continuing for a 38-year old man who disappeared near Gladstone, the newspaper said.

Flood waters in the Fitzroy are expected peak at 9.4 meters by Jan. 4, Rockhampton’s municipal government said.

Flood Alerts

Flood alerts have been issued for at least 10 rivers in Queensland after some regions recorded record rainfall during December, according to the Bureau of Meteorology.

States of natural disaster have been declared in 41 of Queensland’s 73 municipalities covering about a million square kilometers (366,000 square miles).

Higher spending on disaster relief may pose a threat to Fraser’s efforts to regain the AAA credit rating the state lost in 2009. Queensland has nearly completed A$15 billion of asset sales to win back the top rating from Standard & Poor’s.

New South Wales and Victoria, the nation’s most populous states, offered relief personnel to help with the flood response while Prime Minister Julia Gillard yesterday announced payments of as much as A$1,000 per person for those that have lost their homes. Victoria has sent five flood specialists and New South Wales is providing 20 disaster management workers to help emergency services in Queensland.

Small Business Aid

Today, Gillard and Queensland Premier Anna Bligh announced additional assistance for small businesses and primary producers. Cash grants will help pay cleanup expenses and recovery costs including providing feed to stranded livestock, the Queensland government said on its website.

While coastal areas such as Rockhampton may not yet feel the full effect of the floods, inland areas are starting to recover after peak water levels passed.

The town of Emerald, located about 270 kilometers inland from Rockhampton, reopened some roads although residents aren’t being encouraged to return to their homes, the Central Highlands municipal government said on its website.

--Editors: Paul Tighe, Mark Rohner

To contact the reporter on this story: Robert Fenner at [email protected]

To contact the editor responsible for this story: Paul Tighe in Sydney at [email protected] [link to www.businessweek.com]