January 22, 2013 / 4:31 AM / in 5 years

UPDATE 4-Storms shut Australian iron ore ports, stop zinc shipments

* Tropical storm in Australia shuts Rio, BHP, Fortescue iron ore ports

* Storm set to intensify to cyclone strength

* Offshore oil and gas fields also shut

* Second storm on other side of Australia halts zinc shipments

By James Regan

SYDNEY, Jan 23 (Reuters) - A tropical storm intensifying off Australia’s northwest coast brought nearly half the world’s iron ore trade to a halt on Wednesday, idling huge ports used by miners Rio Tinto and BHP Billiton .

Port Hedland closed on Tuesday evening as the tropical storm gathered strength in the Indian Ocean, sending dozens of vessels in search of safe harbours.

Port Hedland is used by BHP Billiton, Fortescue Metals Group and Atlas Iron which expect to ship more than 200 million tonnes of ore this year, accounting for a fifth of global sea-borne trade in the steel-making raw material.

Rio Tinto, which ships more than 200 million tonnes of iron ore through Dampier and Cape Lambert, said it expected to also shut operations at Cape Lambert and Dampier Port.

At 02:00 WST (18:00 GMT) a tropical low was estimated to be 120 kilometres northwest of Port Hedland and 150 kilometres northeast of Karratha and moving west at 16 kilometres per hour, according to the Australian Bureau of Meteorology.

Iron ore prices have gained support from concerns that Australia’s cyclone season, which runs from November until April, will reduce supplies.

Most of the iron ore mined in Australia is contracted by Chinese steel mills, with Japanese and South Korean mills also big buyers.

Total iron ore shipments from Port Hedland in December reached a monthly record 26 million tonnes.

The region between Port Hedland and Dampier is known among mariners as “cyclone alley”, with at least half a dozen cyclones hitting from November to April each season.

The current storm is forecast to intensify to a Category 1 cyclone -- the weakest on a scale of one to five -- early on Wednesday. Gales of up to 100 kph (60 mph) could develop between Port Hedland and Dampier on Wednesday, the Australian Bureau of Meteorology said.


Oil and gas producers in the area were also bracing for the storm. Apache Energy said it had suspended operations at the Stag and Van Gogh oil fields due to the cyclone threat.

The Stag field is located in 161 feet (49 meters) of water 60 km (37 miles) off Dampier. Apache is the operator of the Stag field and has a 33.3 percent stake. Santos has the remaining 66.7 percent.

Apache also holds a 52.5 percent interest in the Van Gogh field, with Inpex owning the rest.

A separate tropical storm in Australia’s remote northeast briefly reached cyclone strength and forced China’s MMG Ltd to temporarily halt shipments of zinc concentrate from its Century mine, the second-largest zinc mine in the world.

The storm crossed the Queensland state coast with heavy rain and wind gusts of up to 100 kph (60 mph). It is forecast to move further inland before tracking south on Wednesday.

MMG has also restricted zinc processing at its mine, located about 300 km (185 miles) from the port of Karumba, it said, but expected to resume shipping on Wednesday if the weather eased. The Century mine has a production capacity of 500,000 tonnes.

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