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Australia Flies Aid to Flooded Town, Risk to Coal Areas

An Australian military aircraft on Friday was due to deliver needed supplies to a flood-stricken town hit by the worst of summer flooding in eastern parts of the country, with coal mining and agriculture also affected.

Mining equipment is submerged by flood waters on January 6, 2011 in in the central Queensland city of Rockhampton, Australia.
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Mining equipment is submerged by flood waters on January 6, 2011 in in the central Queensland city of Rockhampton, Australia.

More than 11,000 people in the state were isolated by the flooding and thousands had been evacuated, according to emergency services authorities.

The C-130 Hercules aircraft will carry bedding and other humanitarian supplies to the town of Moree in the north of New South Wales, with a population of less than 8,000, the Australian Defence Force said in a statement.

The Bureau of Meteorology also issued a severe weather warning for parts of Queensland state on Friday, noting an upper level trough over central parts of the state and said some areas had seen up to 132 mm of rain since Thursday morning.

The Queensland Resources Council said it was closely monitoring the situation across mining areas.

"However, sites are reportedly dealing well with what are traditional wet season issues such as site access and water accumulation," said Queensland Resources Council Chief Executive Michael Roche.

He said the state's coal mines were still carrying an estimated 300 gigaliters of water from last year's record wet season.

Floods and wild weather last year inundated coal mines and damaged crops. Australia is the world's largest coal exporter and since it accounts for roughly two-thirds of global trade of coking coal, used for steel production, fresh floods particularly in Queensland could boost prices.

The Bureau of Meteorology said heavy rains were likely to add to already overflowing rivers and rain could be intense at times, leading to localized flash flooding.

However, the bureau cancelled a severe weather warning for parts of New South Wales.

TV footage showed swirling, brown floodwaters cutting in half the town of Moree, where 2,000 people were reported to be sheltering in evacuation centers.

About 200 people were also reported to have been forced out of their homes by floods in the town of Mitchell in Queensland.

Floods pushed spot metallurgical coal prices to a high of over $350 per tonne early last year after flooding brought coal production to a near standstill in Queensland state. Platts assessed the FOB price for Australian mid-volatile hard coking coal at $196.50 a tonne on February 1.

Thermal coal prices were also pushed up, with the benchmark price for thermal coal to Japan, Australia's largest coal buyer, settled at a record $129.85 per tonne in April 2011. Prices have since drifted lower to around $118 per tonne.

The flooding over the past week could also affect crops, the government's commodities forecaster ABARES said on Thursday, adding the rain has reportedly affected sugarcane, soybeans and corn, and could affect crop yields in New South Wales.

Flash floods across Australia's Queensland and New South Wales states in early 2011 killed around 35 people, swamped 30,000 houses, swamped coal mines and wiped out roads, bridges and rail lines, denting Australia's economic growth.

Storm damage is estimated to have cut Australia's commodity-weighted economy's gross domestic product growth by A$20 billion, or 1.5 percent, in the 2010-2011 financial year.