Floods affect Rio Tinto's aluminium deliveries
Rio Tinto (ASX: RIO) has declared force majeure on supplies of aluminium from its Boyne smelting division in Australia's Queensland state due to severe flooding.
"Flooding that has already brought much of the state's coal mining industry to a halt and closed the port of Brisbane was preventing deliveries to some domestic and international customers," Rio said.
Rio Tinto Alcan has given notice to its affected customers of a force majeure event impacting the supply of aluminium from Boyne Smelters Ltd near Gladstone as a result of the severe flooding across Queensland.
The floods have cut road and rail access between Gladstone and Brisbane and the Brisbane port is closed, preventing deliveries to some domestic and international customers.
Rio Tinto Alcan said it is investigating alternative arrangements for customers, including shipping aluminium directly out of the Gladstone port.
It also said it is currently unable to provide an estimate of the full impact of the disruption to the supply of aluminium from Boyne Smelters or the duration of the force majeure declaration.
Despite this, premiums for spot primary aluminium in Asia are unlikely to rise due to weak demand and sufficient supplies, according to trading sources.
"Spot premiums should not be affected, unless the problem lasts for months, as that could force clients to buy from the spot market," an industry source said.
Boyne Smelters, 59.4 per cent owned by Rio and operated by its Alcan division, is Australia's largest aluminium smelting operation and is located near Gladstone in central coastal Queensland.
With Reuters