By Robb M. Stewart
MELBOURNE, Australia--Wildfires consuming parts of eastern
Australia are unlikely to dent the economy in the way other natural
disasters have in recent years, despite being the worst to strike
the country's most-populous state since the 1960s.
The biggest fires are centered in the Blue Mountains region west
of Sydney, an area that's popular with tourists but is away from
farmland and key resource-producing regions.
Unlike severe floods in northeastern Queensland state nearly
three years ago that wiped out fruit and vegetable crops and
disrupted coal shipments for months, the latest wildfires will have
an "almost negligible" impact on economic activity, Australia &
New Zealand Banking Group senior economist Felicity Emmett said in
a research report Friday. "The bushfires have caused little or no
damage to the local infrastructure," she said.
On Friday, dozens of fires continued to burn across eastern New
South Wales, although the state's Rural Fire Service said only a
handful were still out of control as cooler temperatures in recent
days helped firefighters tackle the blazes. More than 200 homes
have been destroyed and another 100 damaged in the Blue Mountains
since the fires were sparked last Thursday by unusually high spring
temperatures and strong winds across the state.
The country has been hit by a succession of extreme weather
events in recent years. In 2009, 173 people were killed by
wildfires that swept across Victoria state, and in late 2010 and
early 2011 Queensland state was hit hard by flooding and
cyclones.
Insurance losses for the latest fires have reached around 138
million Australian dollars (US$132.5 million), the Insurance
Council of Australia, an organization representing insurers,
estimated Friday.
Insurance Australia Group Ltd. (IAG.AU) said it had so far
received about 600 claims, but with assessors unable to visit all
affected areas and fires still burning it was too soon to give an
indication of cost. The company's exposure is capped at A$150
million this year, after which its reinsurance kicks in.
The damage bill from cyclones, flooding and fires swelled to
more than A$5 billion in 2011--one of the worst years on record for
natural disasters in Australia. The Queensland floods alone saw
more than 25 million tons of coal production lost and shaved around
three-quarters of a percentage point from economic growth in fiscal
2011, according to ANZ.
By comparison, insurance losses so far this year from wildfires
and tropical storms stand at around A$1.4 billion, the Insurance
Council said.
Rail and port operator Asciano Ltd. (AIO.AU) said Friday the New
South Wales fires had damaged its rail network, disrupting
coal-haulage. A line transporting coal from the Blue Mountains was
closed Oct. 18, but should be running again next week, a spokesman
said.
Asciano hauls coal across New South Wales state, including from
several big mines in the Hunter Valley, to export facilities like
the Port of Newcastle, the world's largest coal export terminals.
Among its major clients are Glencore Xstrata International PLC
(GLEN.LN) and Rio Tinto PLC's (RIO.LN) Coal & Allied unit.
-Rhiannon Hoyle in Sydney contributed to this article
Write to Robb M. Stewart at robb.stewart@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires