Tropical Cyclone Sean causes outage at Rio Tinto’s Pilbara iron ore operations

A loader at Rio Tinto’s Pilbara iron ore operations is out of action following flooding rains brought by Tropical Cyclone Sean.

A loader at Rio Tinto’s WA iron ore operations will be out of action for three to four weeks.

A railcar dumper at Rio Tinto’s East Intercourse Island port facility could be out of action for three to four weeks due to flooding caused by Tropical Cyclone Sean, however the company said there will be no impact on its production guidance for the year.

Rio said record rainfall along parts of the Pilbara coastline in Western Australia had impacted its operations, including the dumper, which shipped 45 million tonnes of ore in 2024.

“Assessments are ongoing,’’ Rio Tinto said.

“Initial indications suggest the dumper at East Intercourse Island could be offline for three to four weeks, as rectifications works are required to repair flood damage.

“Recovery works within the broader iron ore system are progressing, with the majority of rail and port operations now returned to operations.’’

The flooding followed rainfall at Karratha recorded at 274mm on January 20, Rio said.

Rio said it would provide an update on the incident at its full year results briefing on February 19.

But while first quarter shipments would be affected, the overall shipment guidance for 2025 remains unchanged.

Rio shipped 328.6 million tonnes of iron ore from the Pilbara in 2024, 1 per cent lower than the previous year, with guidance for 2025 the same as for 2024 at 323-338 million tonnes.

The flooding at East Intercourse Island came 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 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 earlier this week.

Some brokers predict iron ore prices, currently hovering around $US100 a tonne, will slump to $US80 a tonne this year.

RBC Capital Markets said in a note to clients on Friday that the loader outage would result in a “marginal negative impact”.

“The initial indication of three to four weeks’ downtime for the car dumper suggests that 3-4Mt of iron ore shipments could be impacted in the first quarter,’’ RBC said.

“The Pilbara is mine-constrained, not port-constrained, so we think 2025 shipments are likely to be made up in the second half.

“However, from a product quality and equity volumes perspective, the impact from downtime at East Intercourse Island is more meaningful than the headline number would suggest in the first quarter.’’

RBC said the site in question was used to ship Rio’s higher grade Pilbara Blend, and from recent updates, it was clear that port stocks were already low.

“We would argue that a risk premium may start to be factored into the iron ore price (particularly mid-grade products such as Pilbara Blend),’’ RBC said.

Rio shares were 0.5 per cent lower at $117.41.

Originally published as Tropical Cyclone Sean causes outage at Rio Tinto’s Pilbara iron ore operations