Queensland’s flood crisis continues to hit corporate Australia, as local stocks and the dollar come under pressure on economic concerns.
The Australian dollar is continuing to face heavy pressure on the back of the crippling impact of the worst floods the state has seen since 1974.
The Australian dollar was trading at US98.45 cents late today, up from a morning low of US98.06c that had served as its lowest level since December 9.
The increasing impact of floods that began in December and have dented local economic forecasts and confidence have weighed on the currency for much of the past week.
After surging broadly in the second half of 2010 on the back of a mining boom and a string of interest rate hikes from the country’s central bank, concerns about the floods’ impact on the area’s mining and farming industries have coupled with broader European debt concerns to weigh on the Australian dollar.
The Australian sharemarket closed higher today on the back of the resources market but company exposures to Queensland’s floods limit the gains.
The benchmark S&P/ASX200 index was up 13.5 points, or 0.29 per cent, at 4,724.2 points, while the broader All Ordinaries index was up 17 points, or 0.35 per cent, at 4,831.9 points.
Companies affected by the floods have seen their shares fall on the Australian market, with Caltex Australia hit by investors today when it said a shut down at its Queensland refinery could cost up to $10 million.
Caltex’s Lytton refinery near the Port of Brisbane is due to re-start partial production Thursday despite floodwaters reaching the city.
“Full operation of the refinery will be dependent on Brisbane Port operations, which are currently suspended due to the flood situation, returning to normal,” the company said.
Construction giant Leighton Holdings today joined the growing list of companies to announce its businesses would be affected by the floods.
Leighton said in a statement that rain and flooding since December had impacted its contract mining activities in Queensland “with varying degrees of severity”.
“Based on current information some mining operations have recommenced whilst others remain on reduced rosters as dewatering continues,” the company said.
Construction projects had also been affected, including Leighton’s largest infrastructure project, the $4.1 billion Airport Link in Brisbane, where work has stopped.
Transport company Asciano also joined the flood affected-list today, saying extreme rainfall across Queensland continued to affect coal rail network availability, resulting in significant speed restrictions.
The company said that in Queensland, the Blackwater coal system had closed and the Goonyella coal system continues to operate well below capacity.
Excavating and earth moving contractors Huddy’s Mining Services revealed today it has had to cease work at Queensland’s Baralaba mine because of the worsening floods.
Cockatoo Coal, which owns the Baralaba mine near Rockhampton in central Queensland, announced earlier this week it expected production at the coal mine to be suspended for several weeks while it removed water and cleans up the flooded main pit.