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Brewing cyclone threatens Australia's iron belt coast
January 8, 2013 / 5:41 AM / in 5 years

Brewing cyclone threatens Australia's iron belt coast

* Possible cyclone could approach Pilbara by Thurs -forecasters

* Would be Australia’s first cyclone this season

* Almost all Australia ore is mined in country’s far west

SYDNEY, Jan 8 (Reuters) - A cyclone is expected to develop later on Tuesday off Australia’s northwestern coast before approaching the Pilbara iron ore mining region, weather forecasters said.

International prices paid for iron ore needed to make steel have been climbing ahead of the start of the Australian and Brazilian cyclone seasons, which typically run from November 30 to April 30, in part over concerns shipments could face delays.

A tropical low located south of the Lesser Sunda Islands was expected to intensify as it moves in a generally southwest direction at a speed of 13 km per hour, reaching cyclone strength well north of the Australian mainland, according to the Australian Bureau of Meteorology.

By Thursday the system may take a more south southwest track and approach the west Pilbara coast, it said. The cyclone is forecast to be packing winds of up to 224 kph by that time.

There have been no cyclones so far this season in Australia, which along with Brazil accounts for about 70 percent of the world’s seaborne iron ore trade.

Benchmark iron ore with 62 percent iron content .IO62-CNI=SI was last quoted at $153.90 a tonne, the highest since mid-October 2011, according to Steel Index.

Almost all of Australia’s ore is mined in the nation’s far west, a sparsely-populated expanse four times the size of Texas serviced by only a handful of ports.

Port Hedland on the northern Pilbara coast is used by BHP Billiton , Fortescue Metals Group Ltd and Atlas Iron to ship hundreds of millions of tonnes of ore annually.

The nearby ports of Dampier and Cape Lambert are used by Rio Tinto , which last year shipped more than 200 million tonnes of iron ore.

Daniel Frost, harbour master for Port Dampier, said the storm’s progress was being monitored.

“We’ll wait for future reports and take the necessary action when needed,” he said.

Last March, a cyclone also stopped production of about a quarter of Australia’s daily oil production of about 390,000 barrels. Chevron, Apache Corp, Woodside Petroleum and Santos Corp suspended offshore drilling and evacuated staff as Cyclone Lua approached.

Reporting by James Regan; Editing by Joseph Radford

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