News Room - Steel Industry

Posted on 21 Dec 2009

Cyclone Halts BHP Iron Ore Shipments, Threatens Mines

Tropical Cyclone Laurence, which last week caused evacuations of oil and gas rigs, is moving into Western Australia’s iron ore-rich Pilbara area, causing BHP Billiton Ltd. to suspend shipments of the steel-making ingredient.

 

The world’s biggest mining company halted iron ore shipments after Port Hedland was closed today, Melbourne-based spokeswoman Samantha Evans said in a phone interview. The port was closed at 1 a.m. and there are no immediate plans to reopen it, Harbor Master Lindsay Copeman said.

 

“We expect there may be some production interruptions at some operations because of heavy rainfall,” Evans later said in an e-mailed statement. “Otherwise we are mainly just keeping a watch on the cyclone’s path.”

 

The Pilbara includes 11 iron ore mines operated by Rio Tinto Group and seven by BHP Billiton. Cyclone Laurence is the first of the season in Northwestern Australia, which accounts for 73 percent of the nation’s natural gas exports and 62 percent of its mining production. The area may experience six cyclones this season, which runs from November until April, according to an October forecast by the Bureau of Meteorology.

 

Red Alert

 

A red alert is in place for some areas of Western Australia, the state’s Fire and Emergency Services Authority said in a statement today. At 8 a.m. today local time, the category four system was about 220 kilometers (137 miles) west-southwest of Broome and moving south at 6 kilometers an hour, it said.

 

“A period of very destructive winds with gusts to 260 kilometers per hour developing late this morning or early this afternoon” is expected, the authority said. “Heavy rainfall is expected in coastal parts of the western Kimberley and eastern Pilbara” today, which will extend to the inland eastern Pilbara tomorrow, it said.

 

Woodside Petroleum Ltd., operator of the Pluto liquefied natural gas project in Western Australia, has suspended its operations at Dampier port due to the cyclone’s effects, the port’s harbor master, John Fewings, said in a phone interview today. The port itself is unlikely to close, he said.

 

“Woodside have stopped shipping operations under their own rules,” Fewings said. The Perth-based company maintains the Withnell Bay LNG jetty and the King Bay Supply Base in the area, the authority says on its Web site.

 

Woodside spokeswoman Yvonne Ball declined to immediately comment.

 

‘A Close Eye’

 

Rio Tinto, the main customer of Dampier port, said the cyclone is unlikely to affect the company’s iron-ore production and shipments. Rio is “keeping a close eye” on the cyclone’s path, which is expected to pass well to the east of the company’s mines in the region, Perth-based spokesman Gervase Greene said in a phone interview today.

 

Operations at Newcrest Mining Ltd.’s Telfer gold mine in the eastern Pilbara are continuing, Melbourne-based spokeswoman Kerrina Watson said in an e-mailed statement. Australia’s largest gold producer is taking precautions with the first stage of its cyclone preparation plan in place, she said.

 

Fortescue Metals Group, which started shipping iron ore from its A$2.8 billion ($2.6 billion) Pilbara project to China last year, is operating as normal, Perth-based spokesman Cameron Morse said.

 

“We are continuing to monitor its path very closely, at this stage the bureau is expecting it to pass to our north,” Morse said today by phone. “At the mine site our operations are continuing so we are mining, processing and railing. Preparations are also being made so the mine is ready if the cyclone deviates from its plotted course.”

 

Liquefied natural gas projects on islands off the coast operated by Chevron Corp. and Apache Corp. are unaffected by the cyclone, spokesmen Guy Houston and David Parker said.

 

Kimberley Impact

 

Laurence last week affected the sparsely populated Kimberley coastal region’s energy and mining projects. Mt. Gibson Iron Ltd. evacuated 220 employees from its Koolan Island facility. HWE Mining Pty Ltd. evacuated workers off Cockatoo Island, where it mines iron ore in partnership with Cleveland- based Cliffs Natural Resources Inc.

 

Karoon Gas Australia Ltd., ConocoPhillips’ partner in an exploration venture off the northwest coast, suspended operations at its Transocean Legend drilling rig because of poor weather caused by the cyclone. Thailand’s PTT Exploration & Production Pcl evacuated workers from the Jabiru and Challis fields and shut production.

 

Cyclone George in March 2007 caused flooding at Energy Resources of Australia Ltd.’s Ranger uranium mine in the Northern Territory. That storm killed two workers and injured 16 others at Fortescue Metals Group Ltd.’s iron-ore operation in Western Australia.

 

Cyclone Tracy, one of the worst natural disasters in Australia’s history, killed 71 people on Christmas Day, 1974 when it struck Darwin, according to the government’s Emergency Management Authority. The storm forced 35,362 of a population of 47,000 to flee, the nation’s biggest peacetime evacuation.