Severe Tropical Cyclone Lua to Hit Australia Coast Tomorrow

Tropical Cyclone Lua has strengthened into a severe storm, before it’s expected to cross into Australia’s northwestern Pilbara region tomorrow, the world’s biggest source of seaborne iron ore.

Lua may bring winds of more than 200 kilometers an hour (124 miles) and heavy rain over the weekend, remaining severe through landfall, the Bureau of Meteorology said in a notice posted on its website at 12:17 p.m. local time.

The port of Dampier, used by Rio Tinto Group (RIO), the world’s second-biggest shipper of iron ore, is shutting down in anticipation of large swells, according to Gervase Greene, a spokesman for the company. London-based Rio Tinto has secured its Dampier Salt operations while iron ore mining further inland is continuing, he said.

The cyclone has already prompted Woodside Petroleum Ltd. (WPL), Apache Corp. (APA) and Santos Ltd. (STO) to shut output at offshore fields that account for more than one-quarter of Australia’s oil output. Port Hedland, the world’s biggest iron ore port used by BHP Billiton Ltd. (BHP) and Fortescue Metals Group Ltd. (FMG), yesterday shut in anticipation of the storm.

Lua has strengthened into a severe category 3 storm, the Bureau of Meteorology said on its website. The cyclone scale runs from one to five, with five being the strongest.

The Mutineer-Exeter floating production, storage and offloading vessel was disconnected yesterday evening, Santos said today in an e-mail. The Santos-operated oil project in the Carnarvon Basin produces about 8,000 barrels a day.

Evacuations

Chevron evacuated workers from Barrow Island where it’s building the $37 billion Gorgon liquefied natural gas project and the Wheatstone LNG venture, the San Ramon, California-based company said in an e-mailed statement yesterday.

Lua has caused 103,800 barrels a day of output to shut, compared with Australia’s daily production of about 393,000 barrels last year. Woodside closed fields at six locations including Vincent and Enfield. Apache shut its Stag project while Santos shuttered output at Mutineer-Exeter.

Cyclone season in Australia typically runs from November to April, and rain associated with the storms can disrupt mining activities.

To contact the reporter on this story: Elisabeth Behrmann in Sydney at ebehrmann1@bloomberg.net

To contact the editor responsible for this story: Rebecca Keenan at rkeenan5@bloomberg.net

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