Australia iron ore miners on cyclone watch

SYDNEY - A tropical cyclone off Australia's west coat has forced mining companies and oil producers to shut down ports, railways and offshore oil rigs to minimise damage from the region's second powerful storm this season. BHP Billiton Ltd and Rio Tinto Ltd/Plc said on Monday they were closely monitoring Cyclone Nicholas as it made its way towards iron ore mining operations in Western Australia.

Australian television footage of coastal communities showed people being evacuated or strapping down belongings as they braced for the storm, the second to occur inside Australia's so-called "Cyclone Alley" during the November-to-March storm season. Ports in the Indian Ocean, used to ship hundreds of millions of tonnes of iron ore from the companies' mines in the Pilbara region, have been idled and freighters sent to safe harbors to ride out the storm.

Nicholas was packing winds of up to 70 kilometers per hour and swells of up to nine meters, according the Australian Bureau of Meteorology. At 9:00 a.m. local time (0000 GMT) the cyclone was estimated to be 315 kilometers (200 miles) north of the community of Exmouth and 315 km northwest of Karratha and moving southwest at nine km per hour, it said.

A Rio Tinto spokesman said the company's ports at Dampier and Cape Lambert were closed over the weekend and rail operations extending to the company's inland mines had stopped, though mining operations were unaffected. "It's more a case of the sea lane approaches for those ports, which are subject to forecasts for quite large swells," company spokesman said. "The last place those ships want to be is stuck near land," he said.

BHP said in an email that it was keeping a close eye on the storm, though its iron ore operations in the Port Hedland area were continuing for now. The sparsely populated Pilbara region, some 1,900 km north of Perth, is home to scores of iron ore, manganese, nickel and bauxite deposits as well as nearby offshore oil and gas wells.

Woodside Petroleum has shut its Cossack and Enfield offshore oil rigs, which produced around 74,000 barrels a day and 30,000 barrels a day respectively in the December quarter, while Chevron said on Sunday it too was halting some production. Santos Ltd last week shut down its oil fields in the region. Another oil producer, AED Oil Ltd. stopped production at its field in the Timor Sea.

(By James Regan, Reuters, 18/02/2008)