Iron Ore Majors Admit Cyclone Veronica Damage

Major Australian miners BHP and Rio Tinto have both revealed that they were adversely affected by the recent category four Cyclone Veronica and that they have suffered iron ore production losses.

Cyclone Veronica, a severe storm with very destructive winds and large volumes of rainfall, swept though the Pilbara region on the north west coast of Australia from about March 22 to March 26. There are at least three major iron ore export ports on that coast in addition to oil and gas terminals. And those ports are served by key road and rail infrastructure.

BHP

First up, mining giant BHP. Rail and port operations for BHP are "ramping up" after being suspended following the passage of Veronica. The company adds that there has been "no major damage" but there has been "isolated flooding" both on site and on sections of rail leading to/from the port. BHP is therefore operating at a reduced rate and is not expected to return to full capacity until later this month, the company said in a statement. BHP estimates that Veronica caused a reduction in production of about six to eight million tons. The company adds that it intends to meet its contractual obligations.

Rio Tinto

Secondly, Rio Tinto. It's a different story for this Australian mining behemoth. As previously reported by FreightWaves, Rio's Cape Lambert/Port Walcott facility took a clobbering. Rio has repeated its earlier statement that it had declared force majeure (i.e. unlike BHP it won't meet its obligations). The port has an export capacity of 185 million metric tons of iron ore. A metric ton is equivalent to 2,204.6 U.S. pounds. The principal iron ore products loaded at Port Walcott are Hamersley Iron Yandicoogina and Robe River iron ore. Rio shipped 57.4 million tons of the former and 32 million tons of the latter in 2018.

In an official statement, Rio has stated that "initial inspections uncovered some damage" to the Cape Lambert A facility. CLA is a finger jetty of approximately 1.9 miles (3km) in length that is used for the loading of iron ore into capesize bulkers. It is one of two jetties, the other being Cape Lambert B. Both jetties can simultaneously handle up to four capesize bulkers. CLA hosts berths 1 to 4 and CLB hosts berths 5 to 8.

FreightWaves understands from sources that only berth number four at CLA is operational. Sources add that berth four at CLA took its first vessel yesterday morning and loading starting this morning. FreightWaves has independently confirmed that there is, at the time of writing, only one vessel at CLA whereas there are four at CLB. We understand that the vessel at CLA is the "Aigaion" (IMO 9268473) a 2004-built, Greece-flagged, dry bulker of 170,081 deadweight. Deadweight refers to the weight-carrying capacity of a ship and is expressed in metric tons. The ship is 289 meters (948 foot) long and 45 meters (148 foot) wide.

At the time of writing, there are 16 bulk carriers of various sizes and flags at anchor in the Port Walcott customs-declared port area. There are a further 30 bulk carriers just outside that area and they are grouped into two clusters, one of 17 ships and the other of 13 vessels, to the north and north west of Port Walcott. There are also three bulk carriers and one cargo ship halfway between Port Walcott and the port of Dampier, which is nearby at a mere 32 miles (52 km) straight-line distance west-by-south. The sea-distance between Walcott and Dampier is a little greater than the straight-line distance as there is a peninsula and several islands between the two.

Rio adds that it expects a production loss of 14 million tonnes of iron ore owing to the passage of the cyclone and also because of a fire at CLA in January. Rio therefore expects its Pilbara shipments to be at the lower end of the 338 million to 350 million tons of its shipping forecast.

Further reporting:

For further details of how Cyclone Veronica menaced the north west coast of Australia and disrupted iron ore production and exports, please see FreightWaves' previous reporting:

Double trouble: cyclones Veronica and Trevor menace Australia

Cyclone Veronica - days, possibly weeks, of shipping delays

Veronica may have flooded WA mines and ports

EXCLUSIVE: Cyclone Veronica clobbers Port Walcott - months of disruption

Image sourced from Pixabay

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