Cyclone expected in Australia's iron ore belt

PERTH, Australia Thu Feb 21, 2013 4:14am EST

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PERTH, Australia Feb 21 (Reuters) - A weak tropical low off Australia's northwest coast is expected to strengthen into a cyclone over the weekend, moving toward the country's western Pilbara iron ore mining belt, the Australian Bureau of Meteorology said on Thursday.

The tropical storm is likely to develop into a cyclone late on Saturday or Sunday off the state of Western Australia.

"Next week there is a significant risk that this system will become a severe tropical cyclone and impact the Pilbara or West Kimberley," the weather bureau said on its website.

The Pilbara region ships nearly half of the world's seaborne iron ore, mostly to steel mills in China, Japan and South Korea.

The area is home to Port Hedland, which handles about a fifth of the world's seaborne-traded iron ore and is used by BHP Billiton, Fortescue Metals Group and Atlas Iron.

The ports of Dampier and Cape Lambert, used by Australia's biggest iron ore miner Rio Tinto , are also located in the Pilbara region.

All three ports were forced to shut late last month after a storm measuring category 1 -- the weakest on a scale of one-to-five.

Australia's cyclone season runs from November to April and the region between Port Hedland and Dampier is known among mariners as "cyclone alley", with at least half a dozen storms forming there each season.

The northwest region is also home to two of the country's largest gas production facilities, Woodside's Northwest Shelf and Pluto liquefied natural gas (LNG) plants.

Woodside, Santos, Chevron, Apache and BHP Billiton also produce oil from offshore fields that contribute about a third of Australia's oil production of 390,000 barrels per day.

Oil and gas companies often shut down production during severe cyclones. Santos said its floating production and storage, and offloading vessel that it uses in the region is currently undergoing maintenance in Singapore.

Other operators in the area did not immediately respond to requests for comment.

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