Rio Tinto Declares Force Majeure After Tropical Cyclone Veronica

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Miner Rio Tinto declared force majeure on some contracts after Tropical Cyclone Veronica battered the western Australian coast last week.
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“Rio Tinto’s iron ore operations in the Pilbara, Western Australia, are progressively resuming following the passing of Tropical Cyclone Veronica,” the company said in a release Monday. “However, initial inspections uncovered some damage to the Cape Lambert A port facility. As a result, Rio Tinto has declared force majeure on certain contracts and is working with its customers to minimise any disruption in supply.”
The cyclone marked the second such storm to batter Australia in short succession, the other being Tropical Cyclone Trevor.
According to the company, the impact on iron ore production amounts to 14 million tons.

“The impact of the disruption to production caused by the cyclone and repairing the damage sustained at the port facilities, combined with the damage caused by the fire at Cape Lambert A in January, will result in a loss of approximately 14 million tonnes of production in 2019,” the company stated. “As a result Rio Tinto’s Pilbara shipments in 2019 are expected to be at the lower end of the 338 and 350 million tonnes (100 per cent basis) guidance provided.”

The iron ore price on the Dalian Commodity Exchange surged to start the week. Paired with Vale SA iron ore mine closures in Brazil — following the fatal tailings dam breach in late January at the miner’s Corrego do Feijao mine – the iron ore price is particularly well-supported at the moment on account of supply uncertainty for the steelmaking raw material.
According to the miner, the Cape Lambert A is an iron ore terminal capable of loading more than 85 million tons per year, Hamersley Iron Yandicoogina (HIY) and Robe River products being the principal goods to move through the port.
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Last year, Rio Tinto shipped 57.4 million tons of Hamersley Iron Yandicoogina and Robe River products, according to the Rio Tinto release.

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