Australian floods submerge towns, coal exports hit

GRACEMERE, Australia (Reuters) - Military aircraft ferried supplies to an Australian town slowly sinking beneath swollen rivers on Monday, as record flooding in the country's northeast severed roads and ports, curtailing coal exports and devastating farmland.

Floods covering an area the size of France and Germany combined submerged the Capricorn Highway, the major traffic artery through Queensland state. High waters surged into homes in the sinking town of Rockhampton, sending furniture and refrigerators cascading down torrents of floodwater.

Storm warnings were issued in southern Queensland late on Monday, with heavy rain and new flash floods forecast.

Motorists were told to avoid flooded roads after a man drowned in central Queensland - bringing to two the official death toll in what state Treasurer Andrew Fraser called a "disaster of biblical proportions."

Floodwaters have brought most coal mining operations to a halt in Queensland -- the state exporting the majority of the coking coal produced in Australia. Sugar cane production was also hit as was -- to a lesser extent -- the grain harvest.

The state's premier said recovery would take weeks.

Rockhampton, a community of 77,000 just off the Pacific coast and 600 km (370 miles) north of the state capital Brisbane, was accessible mainly by emergency services boats.

Rescue workers escorted stranded patients out of hospitals, police ordered reluctant residents to leave their homes, and electricity company teams made their way up to abandoned homes to ensure power was switched off.

Snakes slithered their way across the waterlogged highway a few km outside the devastated town.

Police cordoned off vast swathes of territory to keep people out of flooded areas. Emergency officials erected dozens of tents for a "tactical medical center" at the small airport in the coal port of Gladstone -- about 100 km south of Rockhampton.

Rockhampton resident Reg Wilson said police gave him little choice but to leave his home.

"A policeman came along in a car with a gun on his hip who said 'You be out of here by five o'clock or else'," he said. "When a man with a gun talks to you like that, you get out."

Flooding has caused more than A$1 billion ($1 billion) in damage, forced some 200,000 residents from their homes and hit commodity exports that are a mainstay of the Australian economy.

Mining operations were all but at a standstill in Gladstone's port, normally piled high with coal for shipment, and coal trains were idle -- their route to the port cut off by washed-out rail lines.

COAL OPERATIONS HIT HARD

Global miners, including Anglo American and Rio Tinto, have canceled shipments and declared force majeure.

Coal is Australia's number one export earner, accounting for $55 billion dollars of export revenue each year.

"This is a major natural disaster and recovery will take a significant amount of time," Prime Minister Julia Gillard said while announcing financial aid for flood victims.

"The extent of flooding being experienced by Queensland is unprecedented and requires a national and united response."

The floods were triggered by cooling "La Nina" ocean currents that produced monsoon rains over the western Pacific and southeast Asia on the heels of months of downpours.

Queensland's interior, normally a vast outback of cattle properties, farms and mines, is now an inland sea, dotted with the roofs of flooded homes and islands with stranded livestock.

The state's emergency coordinator, Police Deputy Commissioner Ian Stewart, told reporters flood waters in Rockhampton stood 9 meters (30 ft) above normal early on Monday.

"Today we'll see resupply of Rockhampton by military aircraft taking supplies into (nearby) Mackay and then road transporting them down to Rockhampton," he said. "That will continue until such time as the road is cut."

The major coal port of Dalrymple reopened, but nearly 50 ships stood offshore unable to dock. At least 18 more were waiting outside Gladstone.

"We have just under 1 million tonnes of coal stockpiled. We have a capacity of 6 million tonnes in our stockpile. We are running a very low stockpile," Gladstone Ports Corporation spokeswoman Lee McIvor told Reuters.

Queensland's ports have an annual coal export capacity of 225 million tonnes.

"There are probably about 18 ships waiting, and there probably will likely be more, because the demand for coal around the world is quite high," said McIvor.

Australia is the world's biggest exporter of coking coal used for steel-making and accounts for about two-thirds of global trade. It is also the second-biggest exporter of thermal coal used for power generation.

Queensland also accounts for nearly all of the country's sugar production and export, but this year will need to buy more raw sugar from rivals Brazil and Thailand to meet sales commitments because of drenched canefields.

The industry group Canegrowers estimated up to 18 percent of the 2010 cane harvest has been abandoned and early plantings for 2011's crop were under water.

Australia is also the world's fourth largest wheat exporter. Although Queensland provides only a small fraction of the total harvest, floods could cause as much as half the crop -- 10 million tonnes -- to be downgraded to less than milling quality.

The transportation of all grain in Queensland was at a standstill, GrainCorp Ltd, the country's largest grain handler, said on Monday. Harvesting was disrupted in many areas as machinery was unusable in sodden fields.

Though the latest floods were unlikely to affect the harvest in New South Wales, further south, supply concerns pushed up U.S. wheat futures on the Chicago Board of Trade 1.5 percent to a new 5-month high in trading in Asian time zones.

Authorities warned of health risks from overflowing sewage in towns where floodwaters remained on the rise.

Queensland state Premier Anna Bligh said the flow coming down the river systems was "nothing short of astonishing" and said the effects could last weeks even if rains eased.

"Given the scale and size of this disaster and the prospect that we'll see waters sitting for potentially a couple of weeks...we will continue to have major issues to deal with throughout January," Bligh told reporters.

(Additional Reporting by Chris McCall, Rebekah Kebede and James Regan; Writing by Michael Perry; Editing by Ron Popeski)