Rio Tinto declares force majeure as gas supply crunch hits Queensland alumina refineries

Rio Tinto announced on Tuesday that it has declared force majeure on alumina shipments from its operations in Queensland, Australia, due to a gas shortage. Gas supplies from Rio's Gladstone facilities have been significantly disrupted following an incident on the Queensland gas pipeline in early March, as told by a company spokesperson to Reuters on Monday. In March, the company stated that it was evaluating the impact of fires in Queensland on the gas pipeline that supplies the plant.

About the declaration

A spokesperson stated in an email that the force majeure notice, which affects third-party contracts, is a temporary measure. Force majeure is a legal declaration that releases a company from its contractual obligations due to uncontrollable circumstances. According to the spokesperson, the restoration of full gas supplies is expected to take significantly longer than anticipated, but the company is working diligently to resolve the issue.

"The pipeline operator's current estimate [is] for a return to normal levels in the second half of 2024. Until then, Yarwun and QAL [Queensland Alumina Limited] will continue to operate at lower capacities," said the spokesperson. 

The mining giant clarified that its aluminium smelters maintain production levels, and the force majeure declaration only impacts third-party contracts. Bloomberg had previously reported on Rio Tinto's statement, citing sources familiar with the situation. Rio Tinto is steadfast in its commitment to maintaining production levels.

The company anticipates that its aluminium smelters, which source alumina from both its operations and other producers, will be able to continue production until gas supplies from the pipeline are restored to normal levels, the spokesperson said. Rio Tinto continues to closely monitor the situation as one of the world's largest aluminium producers and its precursor, alumina.