Rio Tinto unit Coal & Allied declares 'force majeure' on sales deals UPDATE

Rio Tinto unit Coal & Allied declares 'force majeure' on sales deals UPDATE

	Published : Wed, 13 Jun 2007 12:18 By : Agencies Print this Story

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LONDON (Thomson Financial) - Rio Tinto PLC said its unit Coal & Allied Industries Ltd has declared 'force majeure' on a number of its sales contracts from June 8 due to severe storms at the port of Newcastle and the Hunter region in New South Wales, Australia.

Declaring 'force majeure' relieves Coal & Allied of certain obligations under its contracts.

Coal exports from the port of Newcastle have been hit because of the damage caused by severe storms last week, including disruptions to the rail connection with the Hunter Valley coal mining district.

Rio Tinto runs three mines in the area -- Mount Thorley Warkworth, Bengalla and Hunter Valley Operations -- through its 75 pct owned Coal & Allied.

The unit said it is assessing the impact of the storms on production at each of its mines, and is unable at this stage to provide an estimate of the duration of the force majeure and its effect.

Xstrata PLC and BHP Billiton PLC have also declared force majeure on some of their coal shipments from the Newcastle port due to the heavy rains and flooding.

Meanwhile, Coal & Allied had already announced that it was cutting coal production at the three mines by 20 pct this year due to congestion at Newcastle, the world's leading coal export port.

Last week, another Rio Tinto unit, Energy Resources of Australia Ltd, warned that it expected a net loss of 5-10 mln aud for the first six months of 2007 because of disruptions at its Ranger uranium mine in Australia's North Territory caused by flooding in February and early March.

The single mine company, 68 pct owned by Rio Tinto, had declared force majeure on its contracts on March 7 following wet weather that resulted in 750 mm of rain in one 72-hour period alone.

At 11.51 am, Rio Tinto shares were up nearly 2 pct at 3625.00 pence.

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