Having taken almost one year to recover from historic 2011 floods, Queensland (Australia) faces the threat of another flood, according to the news reports

However Australian authorities have downplayed the risk to coal mine operations in Queensland

Worth mentioning is the fact that, flood water led thermal coal prices to peak at USD142/ton in Jan11 compared to average prices of USD92/ton in FY10

According to our estimates an increase of USD10/ton in coal prices will reduce the earnings by 8.5%-12.5% for giant players i.e. Lucky and DGKC during FY12

We have not yet taken this impact on our financial models thus keeping our FY12 coal price assumption intact at US110/ton (FOB)

Strong price consensus in local cement prices would allow cement producers to pass any additional costs on to the consumers