Rains+hit+Queensland+mine+exports+-+Brenna

Rain hits Queensland mine exports Source: http://www.ft.com/cms/s/0/7b95a2fc-1445-11e0-a21b-00144feabdc0.html Date of article: 12/30/10 Date of extract: 01/11/11

inflation: an increase in prices and fall in the purchasing value of money macroeconomic: economics at a global perspective, concerning inflation, interest rate, etc commodities: an agreement supply: the quantity produced of a product shortage: when quantity supplied does not meet quantity demanded export: sales of goods/services to another country inelastic: when PED < 1, necessity good

Queensland's coal mines are the largest export industry. The heavy rains that hit Queensland puts the world's economic at a risk as the prices for coking coal, iron ore and other steelmaking ingredients are increasing rapidly, contributing to inflationary pressures in emerging economics like China and India. Queensland has already stated that it would be unable to meet supply contracts due to the shortage of coal mines caused by a disruption of weather. This is so far the second highest coking coal prices agreed in contracts, at $225 a tone. It is said that this situation is most likely to be worst in 2011. As Queensland accounts for almost 50% of the world's production capacity in coking coal, this natural disaster has crippled the export infrastructure in Queensland. Unlike agriculture products whereby an advance in technology could help produce GM food, coal mines, iron ores, and other natural resources are unable to be produced using technology. However, these natural resources are the fundamental resources used in producing many goods, which only some may have an alternate source of factor of production. Steel production is a main industry in many countries and hence, finding an alternative source requires countries like Japan to seek commodities with Canada and the U.S. Higher commodity prices are expected, which would be the most reasonable way at the moment.