Rio declares force majeure on coal
Rio Tinto Ltd has declared force majeure on exports from its Hail Creek and Blair Athol coal mines in Queensland. Rio Tinto said the company called force majeure after the Dalrymple Bay Coal Terminal reduced port allocations by 4.1 million tonnes for the first quarter of 2008. "This reduction in port entitlements is significant, and follows numerous reductions throughout 2007," a Rio Tinto spokesperson said. "The size of these reductions in port entitlements will prevent Rio Tinto Coal Australia from performing our obligations under the terms of our coal contracts, which is why we have declared force majeure." Rio Tinto said force majeure would apply to its first quarter sales of 2008. "At this stage we are unable to provide an estimate of the duration of the force majeure event," the Rio Tinto spokesperson said. Rio Tinto is the largest user of the coal terminal in central Qld, and its 1.2 million-tonne share of the 2008 cuts would be split between Hail Creek and Blair Athol. The coal terminal has been expanding in a bid to meet increasing demand, but the development work has also resulted in numerous cutbacks to port allocation during 2007. Rio Tinto shares added $9.57 or 7.45 per cent to $137.97 by 1415 AEDT amid speculation Chinese interests were weighing up a counterbid for the company. Rio Tinto has knocked back the proposal of three BHP Billiton shares for every Rio Tinto share, saying the offer, valued at about $US124 billion ($A141.06 billion), was "way out of the ball park". source: www.smh.com.au 26 November 2007
