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Iron Ore Company of Canada declares force majeure after March 31 fire

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Iron Ore Company of Canada declares force majeure after March 31 fire

Singapore — The Iron Ore Company of Canada, majority owned by Rio Tinto, has declared force majeure on its contracts, as a result of a fire at IOC's Sept-Iles port on March 31, Rio Tinto told S&P Global Platts April 5.

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"Rio Tinto confirms that IOC has declared force majeure on its contracts following a fire at port impacting ship loading," according to a statement released by a Rio Tinto spokesperson.

The statement also said the fire has been extinguished and that the company will work with customers to minimize disruptions and update the market as required.

According to a public statement by Labrador Iron Ore Royalty Corporation on April 3, the fire started on March 31 at the No. 2 reclaimer at IOC's Sept-Iles port facilities.

Market sources were largely unclear as to the extent of the impact as IOC's other berth is currently shut for another two weeks of maintenance.

Given the extent of the damage at the berth, some industry sources expect repairs to take around one to two months, while others are of the opinion that the installation of a conveyor belt may reduce the time needed to get the berth functioning again.

A source with knowledge of the matter confirmed that a ship continues to be berthed at the port, indicating that it might be possible for loading to resume soon.

Shipment data seen by Platts showed that in 2020, China was IOC's largest customer, loading 6.7 million mt of iron ore from the terminal, contributing almost 32% of IOC's exports. However, the same data showed that in the first quarter of 2021, China had slipped to second place in terms of shipment volumes at 0.99 million mt, behind Europe including the United Kingdom at 1.99 million mt, following high levels of iron ore demand and steel production in Europe.

Market participants saw limited alternatives for IOC's customers impacted by the disrupted supply given the general lack of spot cargoes from other high grade pellet and concentrate producers due to high term contractual volumes with European and Middle Eastern steel producers.

Ukrainian concentrates might be one of the few viable alternatives with available spot supply, but the difference in physical specifications may be an issue for some end-users, an international trader said.