Cyclone intensifies, Australia's iron ore mines brace

Tue Feb 26, 2013 8:28pm EST
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PERTH (Reuters) - A powerful cyclone headed for Australia's Port Hedland, that has brought half the world's seaborne-traded iron ore to a halt, has intensified and is set to make landfall late on Wednesday, threatening to flood inland mine operations and rail links.

Weather warnings extend as far as 500 kms (310 miles) inland to the massive mining camps and towns of Tom Price, Mt Newman and Nullagine, operated by Rio Tinto, BHP Billiton and Fortescue Metals Group.

Hardest-hit areas could receive up to 600 millimeters, or 2 feet, of rain in 24 hours, said the Bureau of Meteorology.

Such extensive flooding threatens to submerge hundreds of kilometers (miles) of rail lines owned by the miners and used to transport ore to the ports.

"Extreme weather preparations continue across our mining operations in anticipation of the cyclone moving further inland," BHP said in a statement emailed to Reuters. "Additional operations will be suspended if necessary."

The Pilbara, a sparsely populated and inhospitable outback part of Australia, is the world's largest source of iron ore.

Australia's three main iron ore ports, Port Hedland, Dampier and Cape Lambert, were closed on Monday. Offshore oil and gas fields have also been shut down.

Australia's biggest iron ore miner Rio Tinto plans shipments of 260 million tonnes of ore through Dampier and Cape Lambert this year.

Australian & New Zealand Bank estimates iron ore shipments with a total value of A$500 million ($510.58 million) have so far been sidelined due to port closures.   Continued...

In this radar image by the Australian Bureau of Meteorology, the severe tropical cyclone "Rusty" is seen near the Pilbara region in western Australia at 2300 GMT on February 26, 2013. REUTERS/Australian Bureau of Meteorology/Handout