Insurers and industry are braced for costs running into the billions of dollars as Cyclone Debbie hit land on Tuesday afternoon around Bowen, in Queensland's north, with losses likely to exceed that of Cyclone Yasi five years ago.
Cyclone Yasi, which struck less populated areas of Queensland further north in February 2011 as a category 5 cyclone, caused insured losses of $1.4 billion, according to general insurers peak body, the Insurance Council of Australia. It declared Cyclone Debbie a catastrophe on Tuesday.
Insurance council chief executive Rob Whelan said it was too early to gauge the extent of Cyclone Debbie's damage.
"Insurers are already taking calls from policyholders, and many have teams standing by to enter the impact zone, assess claims and deliver assistance to their customers," Mr Whelan said.
In the past decade, insurers have paid more than $3.6 billion in cyclone-related claims in Queensland, and more than $3.2 billion due to flood claims.
The main industries in the region around Bowen are sugar and coal mining, although it is likely to take several days to clarify the full extent of the disruption.
Ahead of the cyclone hitting land, the Abbott Point coal loader, the region's coal mines and other large industrial centres shut down as they sought to limit the impact of the severe winds and rain forecast.
The area expected to be hit by the cyclone accounts for a key part of the domestic production of coking coal, which is used mostly in the steelmaking process.
"The Bowen Basin, the largest metallurgical coal production region in the world, lies directly in its path," industry consultant AME warned its clients in a note on Tuesday of the prospective impact. "Queensland open cut mines have less ability to absorb heavy rainfall, as most pits still contain water from previous events.
"This storm may impact several million tonnes of production over the coming weeks."
With coking coal selling for more than $US150 a tonne at the moment, this indicates the potential disruption of several hundred million dollars of coal in the coming few months, with the likelihood the price of coking coal could rise as well, which could add to the economic cost.
Then there is the potential for damage to infrastructure such as the rail links to the coastal ports, which could take several months to repair, depending on the damage.
After Cyclone Yasi, widespread flooding and supply disruptions pushed the price of coking coal to more than $US350 a tonne for a time, for example, similar to prices seen in 2008, when there was extensive flooding in the Bowen Basin.
The other significant economic resource in the region, sugar production, is also exposed, with around half of Australia's sugar crop produced in the Burdekin, Proserpine and Mackay areas.
The sugar industry has estimated these three areas account for half of Queensland's 35 million tonnes of sugar production, worth an estimated $1.1 billion.
???"We are expecting to see a lot of the cane lying flat after the cyclone has passed through - how it responds will depend on the amount of rain that falls and the impact of the tidal surge expected along the coast," Canegrowers chief executive Dan Galligan said.
"If the cane is not snapped or underwater for too long, there is a chance of a full recovery."
