Rio Tinto faces slower return to exports after Cyclone Veronica
Rio Tinto is facing a slower return to exports following Cyclone Veronica, as resources giants assess its impact in WA.
Mining giant Rio Tinto is facing a slower return to exports than its Pilbara iron ore rivals after Tropical Cyclone Veronica turned towards its ports.
The Department of Fire and Emergency Services yesterday lifted its red alert for Port Hedland, through which BHP, Fortescue Metals Group and Gina Rinehart’s Roy Hill all export their iron ore, but the cyclone’s move westwards means both Dampier and Karratha remain subject to red alert orders.
Rio Tinto exports its ore through Dampier and nearby Cape Lambert.
The disruption is likely to cost the miners hundreds of millions of dollars in lost production if past events are anything to go by.
A train derailment along BHP’s rail line late last year resulted in suspension of rail operations for five days, costing it four million tonnes of production worth around $US222 million ($313m) in revenue.
The Pilbara iron ore miners are also facing disruptions of around five days, given the Pilbara Ports Authority started vacating Port Hedland, Dampier and Ashburton on Thursday.
Fortescue chief executive Elizabeth Gaines said the company had suspended its rail and port operations over the weekend, although its mining and processing operations had continued unaffected.
“The current estimate of this disruption to shipping is within the range of 1.5 to 2 million tonnes, on the assumption that the Port reopens in the next 24 hours,” Ms Gaines said.
“Once we have had an opportunity to fully assess the situation we will determine our ability to mitigate and offset this impact.”
While the storm system is weakening in intensity, it continues to bring heavy rain to the region and all the Pilbara ports remained closed at the time of writing.
The cyclone has also caused disruptions to the oil and gas operations in the region.
Woodside Petroleum confirmed yesterday that it evacuated most of its workers in the area.
“Due to the severe weather conditions associated with the cyclone, Woodside has evacuated all personnel from our offshore production platforms, and is operating the Karratha Gas Plant and Pluto LNG Plant using essential staff only,” the company said in a statement.
Early indications from Port Hedland are that the town emerged relatively unscathed, given the size of the cyclone at the weekend.
A spokeswoman for BHP said the company had deployed emergency services officers to assess the overall impact to the company’s sites, including its offices at Nelson Point in Port Hedland.
“Once they have declared the site safe BHP will send out area owners to begin their assessment on any damages to operations,” the spokeswoman said.
“Initial inspections show water damage to some buildings at Nelson Point and we are currently working through this situation.”
Ms Gaines said Fortescue’s Port Hedland operations appeared to have emerged unaffected.
“The red alert in Port Hedland was lifted this morning and there is no indication of any damage to our Port infrastructure however the Pilbara Port Authority has yet to reopen the port,” Ms Gaines said yesterday.
On top of the port closures, Rio Tinto has also closed its Robe Valley iron ore mines in the Pilbara’s west. The Robe Valley mines are relatively small in the context of Rio’s big iron ore business, accounting for 16.9 million of the 281.8m tonnes it produced in 2018.
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