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Half world's iron ore trade halted by storm in Australia's 'cyclone alley'

Daniel Munoz / Reuters, file

A train loaded with iron ore travels toward the Rio Tinto Parker Point iron ore facility as an empty train leaves, in Dampier in the Pilbara region of western Australia, in this file picture taken April 20, 2011.

SYDNEY -- A tropical storm intensifying off Australia's northwest coast brought nearly half the world's iron ore trade to a halt Tuesday, closing huge ports used by mining firms Rio Tinto and BHP Billiton.

Port Hedland, Dampier and Cape Lambert ports were in the process of closing on Tuesday as the tropical storm gathered strength in the Indian Ocean, sending dozens of vessels in search of safe harbors.

Iron ore prices have gained support from concerns that Australia's cyclone season, which runs from November until April, will reduce supplies.

Most of the iron ore mined in Australia is contracted by Chinese steel mills, with Japanese and South Korean mills also big buyers.


The region between Port Hedland and Dampier is known among mariners as "cyclone alley," with at least half a dozen cyclones hitting from November to April each season.

The current storm is forecast to intensify to a Category 1 cyclone -- the weakest on a scale of one to five -- early on Wednesday.

Gales of up to 60 mph could develop between Pardoo and Dampier, the Australian Bureau of Meteorology said.

Oil and gas producers in the area were also bracing for the storm. Apache Energy said it had suspended operations at the Stag and Van Gogh oil fields due to the cyclone threat.

A separate tropical storm in Australia's remote northeast briefly reached cyclone strength and forced China's MMG Ltd to temporarily halt shipments of zinc concentrate from its Century mine, the second-largest zinc mine in the world.

The storm crossed the Queensland state coast with heavy rain and wind gusts of up to 60 mph. It is forecast to move further inland before tracking south on Wednesday.