Floods hit two Australian states, thousands evacuated

Floodwaters from the Burnett River inundate parts of Bundaberg, 300kms north of Brisbane January 29, 2013 in this handout picture made available by the Queensland Premier's office.

CANBERRA (Reuters) - Massive summer floods have killed four people and forced thousands of people to evacuate their homes across two Australian states on Tuesday, disrupting air and rail travel and coal production.

A deluge fed by the ex-tropical cyclone Oswald dumped more than 200 millimetres (8 inches) of rain in some areas of the Queensland and New South Wales states over the past three days, swelling rivers and swamping towns.

The worst-hit areas were around Bundaberg, Rockhampton and Ipswich in the Queensland state, and around the northern New South Wales towns of Grafton and Lismore.

A fleet of 14 helicopters rescued more than 1,000 people across Queensland overnight and rescue efforts continued on Tuesday.

"Across Queensland the wild weather has broken a lot of hearts," Australian Prime Minister Julia Gillard said.

Among the four people killed was a three-year old boy, who died in hospital after being hit by a falling tree as he and his mother watched floodwaters in parts of Brisbane, Australia's third largest city.

In Bundaberg, one of the worst hit towns, more than 2,000 homes were swamped and 7,500 people evacuated. People clung to rooftops calling on passing boats to rescue them and television footage showed people being winched from floodwaters.

Brisbane residents have been warned to boil all drinking water as the city's main water treatment plant had been shut, unable to cope with the torrent of muddy water flowing down stream and swelling the Brisbane River.

But the floodwaters have peaked much lower than similar floods in 2011, which inundated Brisbane, and cost more than A$6.6 billion to repair. The 2011 floods cut Australia's gross domestic product by 0.5 of a percentage point, cutting coal production in Queensland by A$6 billion and cutting agricultural production by round A$1.9 billion.

"It is far too early to be talking about the full financial impact," Treasurer Wayne Swan told reporters in Queensland.

COAL, RAIL AFFECTED

The heavy rains inundated areas of Australia's eastern coalfields, dumping up to 400 millimetres of rain on Queensland's Bowen Basin, home to giant open pit mines owned by BHP Billiton (BHP.AX) (BLT.L), Mitsubishi Corp (8058.T), Anglo American (AAL.L), Peabody Energy (BTU.N) and others.

A levee bank surrounding the Middlemount open cut mine in the Bowen Basin was breached and water flowed into the mine, according to part owner Yancoal (YAL.AX), with production likely to be affected for three weeks.

Transport group Aurizon Holdings Ltd (AZJ.AX) was forced to shut parts of its rail operations that haul coal to the port of Gladstone, a key export terminal on the eastern seaboard.

Aurizon said its Moura and Blackwater networks, which links coal mines in the Bowen basin to two export terminals at Gladstone, remain closed due to the rain and floods.

"Aurizon cannot fully assess some locations because the rail line is still under water. However the current expectation is that the Moura and Blackwater systems will be re-opened within seven to 10 days," the company said in a statement.

The floods were not expected to have a major impact on Australia's sugar crop, which has avoided major damage.

Insurer Suncorp (SUN.AX) said it had already received 4,500 claims related to Queensland's flooding and storm-related damage in Queensland, adding it was prepared for the financial impact.

The number of claims drove Suncorp's stock down 2.0 percent, although the company said it had made provisions for natural hazard claims of A$520 million for the 2013 fiscal year.

The Insurance Council of Australia said insurers had received 6,100 claims by early Tuesday, estimated to be worth A$72 million, although more claims were expected.

Airline Virgin Australia (VAH.AX) cancelled 20 flights along the east coast, while Qantas Airways (QAN.AX) said its schedule was returning to normal on Tuesday after all flights to Queensland's Gold Coast were cancelled on Monday.

(Additional reporting by Jim Regan and Colin Packham in Sydney; Editing by Michael Perry)