Australian Miners Struggle as Flood Waters Peak; New National Port Strategy

Chandrasekhar Atreya
07 Jan, 2011
New York City

Australian indexes closed lower as flood waters reach peak and miners struggle to contain flood losses. Insurers declined as policyholders file A$150 million of claims. Australian government unveils a new national ports strategy.

[R]6:00 PM Sydney, Australia – Australian indexes closed lower as flood waters reach peak and miners struggle to contain flood losses. Insurers declined as policyholders file A$150 million of claims. Australian government unveils a new national ports strategy.[/R]

The benchmark index closed lower as flood waters reach peak and miners as coal shipments remain disrupted and are likely to take longer than expected to resume.

The ASX 200 dropped 0.42% or 20.0 to 4,705.00 and dropped 1.51% for the week.

The Australian dollar closed at 99.25 U.S cents in Sydney today.

A new national ports strategy was unveiled by Prime Minister Julia Gillard today, which will need the approval of the states and territories who are responsible for ports, their maintenance and planning. Trade unions and port operators have backed the federal government’s proposal.

The government estimates that the volume of trade through the country’s biggest ports is expected to triple during the next 20 years. The premier said “it is time for the way we plan and oversee our ports to change,” during her visit to Kwinana Port in Western Australia.

Xstrata Plc said it doesn’t know how long the fire at its coal mine in New South Wales will last. The underground fire started at its Blakefield South mine in the Hunter Valley on Wednesday night and inert nitrogen gas was introduced to starve the fire of oxygen.

The Queensland flooding has already generated insurance claims of A$150 million, according to the Insurance Council of Australia.

The council also said that these are only preliminary estimates and do not include the cost of repairs to public infrastructure such as roads, bridges and schools. The council also assured policyholders only need name and address of the property to file a claim and it maintains policies in electronic format.

BHP Billiton Ltd, Xstrata Plc and Anglo American Plc are facing further problems from rains as their South African operations have been hit by unusually high rainfalls.

“Heavy rains over the past few weeks have had an impact on coal production in South Africa,” BHP said in an e-mailed reply to questions today.

Waterside workers in Geelong have decided to take industrial action this weekend, following what their union says is six months of failed negotiations with management.

Maritime Union of Australia workers at Patrick’s bulk and general cargo facilities have decided to take protected action, beginning with reduced shifts at the weekend and a 24-hour work stoppage on Monday.

Stock Movers

BHP Billiton Ltd declined 52 cents or 1.15% to A$44.62 while Rio Tinto finished 1.81% or A$1.56 lower to A$84.48. Fortescue Metals ended lower by 4 cents to A$6.57.

Newcrest Mining fell 1.98% to A$38.61, while Kingsgate Consolidated dropped a cent to A$10.53.

CSR closed up 6 cents or 3.6% to A$1.71 and the company announced plans to return A$800 million to shareholders.

ANZ fell 17 cents to A$22.92 and Commonwealth Bank dropped 4 cents to A$49.89 and National Australia Bank was down 7 cents to A$23.69. Westpac Banking Corp lost three cents to A$22.15.