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Rio Tinto Calls Force Majeure for Queensland Alumina Exports After Gas Supply Problems
May. 22, 2024 08:30AM PST
The expected timeline for restoring full gas flow capacity has been extended to the latter half of 2024.
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Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO) has implemented force majeure for alumina exports from its refineries in Queensland, Australia, due to prolonged disruptions in gas supply, according to media reports.
The notice, which affects third-party alumina sales, is the company's response to ongoing limitations in gas availability due to damage to a Queensland pipeline; it was caused by fires, which led to restricted gas flow.
The expected timeline for restoring full gas flow capacity has been extended to the latter half of 2024.
Rio Tinto’s Yarwun refinery and Queensland Alumina will continue to operate at diminished capacities until the pipeline is fully operational. However, despite the gas supply constraints, Rio Tinto's aluminium smelting operations are unaffected.
Q1 aluminium performance
Rio Tinto reported aluminium production of 826,000 tonnes in Q1 this year, a 5 percent increase compared to the same period in 2023. Alumina production for the first quarter of 2024 remained flat at 1.9 million tonnes compared to the same period in 2023, but was 3 percent lower than the previous quarter due to a gas pipeline disruption that affected the company's Gladstone operations; it has since been repaired and returned to production.
The company notes in its Q1 release that aluminium prices on the London Metal Exchange fell 3 percent over the quarter, although the average price rose 0.4 percent from the fourth quarter of 2023 to US$2,199 per tonne.
Rio Tinto also said demand for aluminium in Europe and North America showed improvement, while Chinese demand remained robust, driven by growth in renewables and electric vehicles. Despite a stable global aluminium production landscape, low reported inventory levels have kept physical markets tight.
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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
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