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Rio Tinto to sue Monadelphous for $500m over 2019 Cape Lambert port fire

Rio Tinto has launched a legal bid to recover $500m it says it lost in iron ore shipments after a fire at its port in 2019.

Fire engulfs Rio Tinto mine in WA

Mining services contractor Monadelphous says it faces a $493m lawsuit from Rio Tinto over a fire at a Pilbara iron ore processing facility that blew a hole in Rio’s annual production hopes early in 2019.

Along with damage caused by Cyclone Veronica, the fire at Rio’s Cape Lambert port in January 2019 helped cut 14 million tonnes from the company’s annual production guidance in 2019, adding to the woes of its flagship division.

Rio had previously blamed the fire, which ripped through an ore processing plant at its port facilities in the Pilbara, on hot metal from welding during a shutdown hitting a moving conveyor belt.

Monadelphous was conducting the maintenance work at the time, and said on Monday the mining giant had filed a writ in the WA Supreme Court alleging it was “in breach of the maintenance contract, thereby causing the fire”.

“Although the writ does not specify any damages, Rio Tinto has separately informed Monadelphous that its claim is for $493m in loss and damage. This amount comprises $35m in material damage costs associated with the reconstruction of the Sinter Fines processing facility, and $458m for a temporary operating solution and business interruption losses arising from the alleged inability to process iron ore during the period of reconstruction of the facility,” the company said.

Monadelphous said it would “fully defend” the claim, but said Rio had invited discussions ahead of serving the writ. The company said it had public liability insurance in place worth $150m.

“Monadelphous denies Rio Tinto’s allegations and claimed losses (which Monadelphous considers have not been substantiated),” the company said.

Read related topics:Rio Tinto
Nick Evans
Nick EvansResource Writer

Nick Evans has covered the Australian resources sector since the early days of the mining boom in the late 2000s. He joined The Australian's business team from The West Australian newspaper's Canberra bureau, where he covered the defence industry, foreign affairs and national security for two years. Prior to that Nick was The West's chief mining reporter through the height of the boom and the slowdown that followed.

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Original URL: https://www.theaustralian.com.au/business/mining-energy/rio-tinto-to-sue-monadelphous-for-500m-over-2019-cape-lambert-port-fire/news-story/74b756105dee7748c8860cbb707266b9