While rail and shipping operations at the Cape Lambert B terminal and the Port of Dampier are now ramping back up after the cyclone, initial inspections have uncovered damage to the 85Mt per annum Cape Lambert A port facility, which primarily ships Hamersley Iron Yandicoogina and Robe River products. 

 

It has been forced to declare a force majeure on certain contracts - it hasn't specified which - and is working with its customers to minimise any disruption in supply.

 

Collectively, the ores represent about 27% of Rio's total product mix, with the balance represented by its main Pilbara blend fines and lump.

 

Cape Lambert A's four berths extend further into the ocean than Cape Lambert B, and are responsible for about 40% of shipping from Rio's Cape Lambert port, or about 6Mt per month. 

 

In 2018, Rio Tinto shipped 57.4Mt of HIY and 32Mt of Robe River products from Cape Lambert A.

 

It was already facing lower exports due to the fire in the Robe River screening facility that forced it to declare the earlier force majeure.

 

Rio now says it expects Pilbara shipments for the year to be at the lower end of the 338-350Mt guidance previously.

 

The company is focused on completing remediation work, but has not detailed the exact nature of the damaged infrastructure at the terminal, nor revealed how long repairs are expected to take.

 

Rio is expected to provide an update in its first quarter operations review on April 16, and plans to make up for lost production.

 

Despite the bad news Rio shares were up 1.5% in morning trade to A$99.42, valuing the resources house at $93.8 billion. 

 

It comes at a time when global iron ore markets are facing at least a 43Mt reduction in supply from Brazil following Vale's deadly tailings dam failure, with the supply side issues boosting the iron ore price to levels not seen for some years.