Cyclone approaches West Australia

A tropical cyclone approaching Australia’s Pilbara iron ore mining belt coast has intensified and winds of more than 250 kms (155 miles) an hour are expected when it crosses the coast on Saturday afternoon local time, the weather bureau said. Tropical Cyclone Lua has been upgraded to a Category 4, the second most severe on the Australian scale. It is expected cross the West Australian coast in a sparsely populated area north of Port Hedland at around 2pm local time, the Bureau of Meteorology said. Heavy rainfall and a very dangerous storm tide with damaging waves and flooding are also expected. Australia’s main iron ore terminals, which are among the largest in the world, were closed on Friday as the cyclone in the Indian Ocean swept toward the Pilbara. Global miners Rio Tinto and BHP Billiton have major iron ore operations in the area. Supply concerns because of the cyclone along with recent gains in Chinese steel prices helped spur iron ore prices to the highest in nearly four months on Friday. Residents in the area around Port Hedland are on high alert and have been warned to take immediate shelter from the cyclone which is set to be the worst to hit Australia since Cyclone Yasi devastated the state of Queensland last year, forecaster Neil Bennett told media. The last of the vessels moored at Port Hedland, used by BHP Billiton, Fortescue Metals Group and Atlas Iron set sail early on Friday and the port is closed. In all, about 400 million tonnes of iron ore passes through the ports in a year. Operations at two ports used by Rio Tinto, Dampier and Cape Lambert, wound down on Friday, while mining and its rail hauling line remained open, a spokesman for Rio Tinto, the world’s second-largest iron ore producer, said. BHP said it was prepared to shut operations if necessary. “If there is any material impact on our production, we will report it in our quarterly production report,” BHP said in a statement. Chevron said on Thursday it was evacuating non-essential personnel from Barrow Island, 70 km off the coast, where it operates oil production facilities and is building the Gorgon liquefied natural gas (LNG) project. The company said it was also evacuating personnel related to its Wheatstone LNG project near the coastal town of Onslow. On Wednesday, Woodside Petroleum and Apache Corp shut several of their oil fields off Australia’s northwest coast as Lua approached. Santos said it has stopped production at its Mutineer Exeter 8,000 barrels a day project. The cyclone has stopped production of about a quarter of Australia’s daily oil production of about 390,000 barrels. Woodside’s Vincent produces an average of 40,423 barrels per day (bpd) and Enfield 19,623 bpd, while the company’s North West Shelf fields produce around 16,503 bpd, according to the latest production report. Apache’s Stag oil field produces about 8,800 barrels a day. Cyclones regularly strike during Australia’s summer and often force offshore oil and gas platforms to suspend operations.