Severe Cyclone Makes Landfall Near Australia’s Iron Ore Hub

(Bloomberg) -- Severe Cyclone Zelia has made landfall near Australia’s iron ore export hub, bringing heavy rainfall and damaging wind gusts, with the system threatening big mines and crucial rail links as it tracks inland.

The powerful cyclone crossed the coast to the east of Port Hedland, the nation’s biggest iron ore export harbor, packing very destructive wind gusts of up to 290 kilometers (180 miles) per hour near its center, according to the Bureau of Meteorology. Winds that strong flatten structures and buckle power lines.

Port Hedland avoided the destructive core of the storm, the bureau said, which made landfall as a Category 5, the strongest on the Australian scale. The system will weaken as it moves inland, but will still have cyclone strength as it tracks through the major iron ore mining region of the Pilbara, which hosts global miners including Rio Tinto Group and BHP Group.

Intense rainfall threatens to flood massive open-cut mines and swamp rail lines to ports, potentially disrupting shipments. Iron ore prices in Singapore spiked above $108 a ton on Friday to a four-month high, before easing.

“Category 5 is top of the scale, it does not get any worse than that,” said Angus Hines, a meteorologist at the bureau. “Extremely damaging and destructive winds, widespread rain, flooding and storm surge are all expected.”

While the Pilbara region is a sparsely populated area, the coastal town of Port Hedland has around 16,000 residents. The harbor was shuttered earlier this week along with other regional ports, which also export natural gas.

Western Australia’s state emergency organizer said on Friday that the storm was creating a threat to lives and homes, urging residents to shelter indoors and warning it was too late to leave buildings.

Australia is the biggest shipper of iron ore, with the steelmaking material accounting for 21% of total goods and services exports in the year to June 2024, worth A$138 billion ($87.2 billion). Zelia is the first Category 5 cyclone to cross near Port Hedland since George in 2007, according to the bureau.

While export ports have been lashed by heavy rain this year from a series of storms, this is the first cyclone of the season to make landfall and threaten mining operations and their rail links. Cyclone Sean damaged a port facility owned by Rio last month, but the storm stayed offshore.

Fortescue Ltd. has shut its Iron Bridge mine 145 kilometers south of Port Hedland, according to a spokesperson. The operation produces a high-grade, wet concentrate product that’s sent via pipeline to the harbor for export.

Ports Reopen

BHP and Rio said Thursday they were putting their cyclone preparations in place, which includes suspending non-essential travel. Liquefied natural gas export terminals are also located throughout the region, mainly operated by Woodside Energy Group Ltd. and Chevron Corp.

Dampier — which exports iron ore and LNG — and Varanus Island have been reopened after inspections of channels and berths, according to Pilbara Ports. Assets operated by Woodside are returning to normal, a spokesperson said.

(Updates with Dampier and Varanus Island ports reopening, Woodside operations returning to normal.)

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