One of Australian mining firm Rio Tinto’s iron ore trains derailed 120km from the Port of Dampier in Western Australia on 11 February. The derailment added to potential export disruptions caused by a planned train drivers strike at fellow firm BHP and maintenance at Roy Hill.
The autonomous train derailed on a section of dual track, leaving the other track unaffected. While this should reduce disruptions, it will make track management more complex and less efficient, as loaded trains must wait for empty trains to pass before proceeding and vice-versa.
Rio Tinto is currently working to remove the derailed cars, but it remains unclear when the affected track will return to normal operations. The company has already launched safety investigations to determine the cause of the derailment.
This incident comes after Rio Tinto experienced below-average shipping in the week leading up to 10 February. Consequently, the derailment is expected to impact deliveries to the port this week. Currently, Rio Tinto boasts more stockpiling capacity than its competitors BHP, Fortescue, and Roy Hill, who share the multi-user Port Hedland facility.
With BHP facing a train drivers strike on 16 February and Roy Hill undergoing regular quarterly maintenance, the derailment will further add to the disruption in Western Australian iron ore exports. Fortescue, another mining firm, has also faced challenges since a derailment outside Port Hedland on 30 December, as it has not returned to average or above weekly loadings.
In recent iron ore market developments, the Argus ICX iron ore index was assessed at $126.70 per dry metric tonne (dmt) cfr Qingdao on a 62 percent Fe basis on 9 February. This figure represents a decrease from the 18-month high of $144.25/dmt reached on 3 January.
The impact of the derailment on Western Australian iron ore exports, coupled with the impending strike and maintenance activities, is likely to exacerbate existing market conditions. As Rio Tinto works to investigate and rectify the situation, the industry will closely watch for updates on the resumption of normal operations.
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