BHP and Rio Tinto expect to ship less iron ore from Australia’s Pilbara region this year in the wake of cyclone Veronica.
Collectively the two Australian mining giants expect production levels to be impacted to the tune of 20 to 22mt in 2019.
“Our iron ore operations in the Pilbara, Western Australia, are progressively resuming following the passing of Tropical Cyclone Veronica,” Rio Tinto said in an update.
“However, initial inspections uncovered some damage to the Cape Lambert A port facility. As a result, Rio Tinto has declared force majeure on certain contracts and is working with its customers to minimise any disruption in supply.
“The impact of the disruption to production caused by the cyclone and repairing the damage sustained at the port facilities, combined with the damage caused by the fire at Cape Lambert A in January, will result in a loss of about 14mt of production in 2019.”
As a result Rio Tinto said its Pilbara shipments in 2019 are expected to be “at the lower end of the 338 and 350mt guidance” previously provided.
Cape Lambert A is an iron ore terminal capable of loading more than 85mt a year. Principal products loaded through this port are Hamersley Iron Yandicoogina (HIY) and Robe River products. In 2018, Rio Tinto shipped 57.4mt of HIY and 32mt of Robe River products.
In its own update BHP said its port and rail operations in Port Hedland were “ramping-up” after being suspended due to Veronica.
“While initial inspections show no major damage to our operations, isolated flooding both on site and sections of the rail leading into the port has limited train movements,” it said.
“Consequently, the port is currently operating at reduced rates and not expected to return to full capacity until later this month.
“Our preliminary estimate of the impact of Veronica is a reduction in production of about 6 to 8mt, and as a result, our 2019 financial year production and unit cost guidance are currently under review.”
BHP said final production impacts and revised production and unit cost guidance will be disclosed once they are finalised.
