RPT-WRAPUP 2-Australia floods hit consumers, coal sector on mend
(Repeats to add byline)
* Coal export ports show signs of returning to normal
* Consumer confidence drops over 5 pct in Jan.
* Coal industry recovery still seen taking months (Updates with QR National comment)
By Rebekah Kebede and Ian Chua
PERTH/SYDNEY, Jan 19 (Reuters) - Coal export terminals showed signs of recovery on Wednesday as Australia began a clean-up process from massive flood damages that could take months and has undermined consumer confidence in the $1.3 trillion economy highly dependent on commodity exports.
Flooding blamed on rains triggered by a La Nina Pacific weather pattern has devastated huge areas of the eastern seaboard, killing 25 people and causing thousands to be evacuated, while destroying crops and crippling Australia's A$50 billion coal industry and causing coal price spikes.
Risks also remain for more wild weather. Australia's weather bureau issued weather warnings on Wednesday for areas of southeast and south central Queensland, including Gladstone, the location of one of the state's major coal export terminals.
"Severe thunderstorms are likely to produce damaging winds, very heavy rainfall and flash flooding," the bureau said.
In a sign of some improvements, Queensland's coal mines are now operating at full permanent staffing levels, coal rail systems are back up and running and the state's two largest coal export terminals said shipments were set to increase as coal rail haulage lines and mines return to normal.
"With the Moura rail line open and the Dawson, Callide and Boundary Hill mines railing coal, the port of Gladstone can now start ramping up export capacity," Gladstone Ports Corporation Chief Executive Leo Zussino said in a statement.
But there were signs that the coal industry will only make a slow comeback, with Gladstone Port, Queensland's second largest coal export port, saying it would take until the end of March for exports to return to normal.
Australia's consumer sentiment has also taken a hit as wall-to-wall media coverage of the floods raised anxieties.
Consumer sentiment fell 5.7 percent in January, the biggest fall in about six months, according to a Westpac-Melbourne Institute report.
"There is no doubt that the sharp slide in consumer sentiment is almost wholly due to the flood disaster across the nation," Savanth Sebastian, an economist at Commonwealth Securities in Sydney said in a note.
Australia, the world's largest coal exporter, accounts for about two-thirds of global coking coal trade, with around 90 percent of that coming from Queensland state. Coking or metallurgical coal is used for steelmaking.
The Queensland Resources Council has estimated that only 15 percent of the 57 coal mines are fully operational, 60 percent are operating under restrictions and another 25 percent have yet to restart production. Damage to the industry is estimated at A$2.3 billion.
Global miners Rio Tinto , BHP Billiton and Xstrata are among major companies involved in coal mining in Queensland.
Australian coal-to-retail conglomerate Wesfarmers expects flooding in Queensland state to significantly reduce output at its Curragh coal mine, the firm said on Wednesday.
Wesfarmers was one of several companies to declare force majeure after extensive rains in December and January shut most of the region's coal mines.
With many mines inundated with floodwaters, Queensland has granted temporary permission to 20 coal mines to pump out excess floodwater and is considering applications from another 16 mines, the state's Department of Environmental and Resource Management said Tuesday.
QR National said on Wednesday that it was re-opening its flood-hit Blackwater coal haulage line which was shut after a Christmas week deluge late last year, allowing those mines that are producing coal to rail it out for export.
The Australian Industry Group, a business lobby, said the wild summer weather, and a rebuilding estimated to last years and to cost between A$5 billion-A$20 billion, should now prompt the government to rethink a planned 2012-13 return to budget surplus.
"We can try and get into surplus by a few dollars in 2013, or we can do what's required now, in the next 12 months, to try and help businesses, and preserve jobs," AIG Chief Executive Heather Ridout told Australian radio.
Prime Minister Julia Gillard told reporters in Brisbane that the government would both rebuild and retain the surplus target.
The construction industry said it was still counting the cost of rebuilding.
"You're more than a month off having an accurate number. They just literally need to be able to visually inspect hundreds of kilometres of tracks, test rails and bridges,..and inspect buildings," said Peter Barda, executive director of the Australian Construction Industry Forum.
"The other great unknown will be not just the scope of the work but the prices. There will be skills shortages, materials shortages, so its likely prices will be higher," he said, declining to give any ballpark figure.
The flood misery went on in some areas and thousands of people in the Victorian town of Kerang were forced overnight to flee across the state border into New South Wales, also hard hit by flooding, after a major levee bank sprung a leak.
Dozens of cities and towns across Victoria remain under threat from flooding in the wake of record rainfall last week, with residents at Warracknabeal also concerned about the strength of protective levees on Yarriambiack Creek.
In Queensland, residents in the rural city of Toowoomba, which was hit by devastating flash floods last week, buried a mother and son on Wednesday. The two had been swept from the roof of their car in the central business district when their rescue rope snapped. (Additional reporting by Rob Taylor in CANBERRA and Sonali Paul in Melbourne; Editing by Ed Davies)
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