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This is worse than timber being eaten by termites it is a termite nest and when they were finished with the fire wood they would be attacking the eatable parts of the home (carpet books furniture and un treated timbers

A nest protected like this and so close to a home can cause huge damage in a very short time.

What adds to the huge potential problem is that the nest can increase in size without being noticed on valueless fire wood and when this depletes there would be a large termite population attacking the home very quickly from within.