Cyclone Sean rocks Rio as it stay silent on Glencore merger talks
Rio Tinto’s iron ore operations have suffered another blow as it remains silent about any merger talks it held with Glencore.
Rio Tinto is counting the cost of another blow to its iron ore operations as it remains silent about any talks it held with Glencore about a mining mega-merger.
Heavy rain dumped by Cyclone Sean has flooded key parts of the Rio iron ore operations in Western Australia’s Pilbara and also hit BHP and Fortescue.
The BHP and Fortescue operations are returning to normal after being disrupted over weekend.
The cyclone affected Rio’s ports and smashed rainfall records around the town of Karratha in the latest setback in iron ore for the mining giant, which was linked to merger talks with Glencore last Friday.
Neither Rio nor Glencore has commented but the prospect that the talks were motivated by an appetite for copper assets has sharpened the focus on Rio’s strategy for life after iron ore. It is understood any talks happened late in 2024 and have ended.
Rio said on Monday that it was still assessing the impact of flooding caused by Cyclone Sean.
“We received record rain along the Pilbara coast ... with Karratha receiving 274mm of rain in a 24-hour period,” a spokesman said.
“There is flooding to our rail and port infrastructure, but our first priority is the safety of our people. Where it is safe to do so, we are assessing the impact of the record rainfall and will restore operations as soon as those inspections have passed, and floodwaters have cleared.”
The flooding comes less than a week after Rio revealed heavy rain had affected its iron ore operations in the December quarter and forced it to eat into stockpiles.
The Pilbara Ports Authority closed Port Hedland, Dampier, Ashburton, Varanus Island and Cape Preston West at the weekend as Cyclone Sean hovered near the coast.
All the Rio ports suffered localised flooding, with the terminal at East Intercourse Island the hardest hit. Rio is assessing significant flooding at the dumper. Dampier Port has reopened and ships will begin making their way in to berth once channel inspections and safety checks are complete.
Rio’s mines would normally be better prepared to cope with cyclone disrupt but the wet December quarter played havoc with its plans. The company drew down on mine stockpiles towards the end of 2024 during what is typically its most productive quarter.
Cyclone Sean also dumped heavy rains across BHP’s port and rail operations, but there were indications any surface water was subsiding quickly as it resumed loading vessels. “We recommenced loading of vessels after Pilbara Ports Authority gave the all-clear, and our port and rail teams are returning to normal operations,” a BHP spokesman said.
BHP is scheduled to issue an operational update for the six months to December 31 on Tuesday, with Fortescue’s December quarter results due on Thursday.
Some brokers predict iron ore prices, currently hovering around $US100 a tonne, will slump to $US80 a tonne this year.
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