Tropical Cyclone Zelia Impact on Australia’s Iron Ore Industry
Tropical Cyclone Zelia impacted Australia’s west coast on Friday, reaching Port Hedland as a category five storm with wind gusts up to 290 kph. It weakened to category four, reducing its impact on the town. Major iron ore ports were closed, affecting operations and supply of key mining companies, as severe rainfall and disruptions raised concerns over iron ore prices.
Tropical Cyclone Zelia made its landfall on the west coast of Australia on Friday, as reported by the weather bureau. The cyclone struck the world’s largest iron ore hub, delivering heavy rainfall and wind gusts reaching 290 kph (180 mph). The eye of the storm crossed the coast near Port Hedland shortly after 12 p.m. local time, initially classified as a category five cyclone—the highest ranking on the scale.
After making landfall, Cyclone Zelia weakened to a category four as it moved south, lessening its impact on the populated center of Port Hedland. Meteorologist Matthew Collopy emphasized the storm’s dangerous nature, stating, \”This is a very dangerous system that will cause significant impacts and is causing impacts as we speak.\”
Zelia is noted as the most formidable storm to strike the Pilbara coast since Cyclone Ilsa in April 2023. The Bureau of Meteorology has warned that the region could experience record rainfall, estimating up to 300 mm (11.8 inches) within 24 hours and up to 500 mm over the coming three days.
In anticipation of the cyclone, Port Hedland’s port—the largest iron ore export facility—was closed on Wednesday. Additionally, the ports of Dampier and Varanus Island were shut down on Thursday evening, as well as Cape Lambert. These ports handle operations for major mining companies, including BHP Group and Rio Tinto.
BHP and Fortescue Mining Company announced that their Port Hedland operations would be temporarily paused for safety reasons, with teams instructed to shelter either at home or designated camps. Fortescue also suspended activities at its Iron Bridge mining site and canceled non-essential travel to Pilbara locations. Rio Tinto confirmed the suspension of operations at Cape Lambert and Dampier and indicated that weather events would impact first-quarter shipments.
All three companies are scheduled to report their financial results in the upcoming week. As a result of the cyclone and anticipated supply disruptions, iron ore futures prices increased on Friday, suggesting a weekly gain, given that iron ore is essential for steel production.
The 15,000 residents of Port Hedland, primarily workers of mining companies, have been urged to seek shelter indoors. Several supermarkets reported closures due to shortages of essential goods as residents prepared for the storm, according to ABC News.
In conclusion, Tropical Cyclone Zelia poses a significant threat to Australia’s iron ore industry, particularly affecting the operations in Port Hedland and surrounding ports. The cyclone, which has lost some strength but still remains dangerous, has prompted safety measures across various mining companies and led to the closure of major ports. The anticipated rainfall and supply disruptions could influence global iron ore prices, stressing the importance of this commodity in steel production.
Original Source: www.insurancejournal.com
