Rio Tinto Group (NYSE:RIO) has invoked force majeure on alumina shipments from its refineries in Queensland, Australia, citing shortages of gas required to power its operations, according to sources familiar with the situation.
The company communicated this decision to its clients on Monday, the sources disclosed on condition of anonymity due to the sensitive nature of the information. Rio Rio Tinto operates the Yarwun refinery, where it manufactures alumina, the essential ingredient for producing aluminum, along with Queensland Alumina Limited, a collaborative effort with Russia’s United Co. Rusal International PJSC.
Operational challenges stemming from a regional gas shortage have hindered the proper functioning of these plants. Rio Tinto had previously indicated in March that it was assessing the implications of fires in Queensland on the gas pipeline supplying the facility.
It’s important to note that the force majeure declaration will exclusively impact sales of alumina to third-party entities, and Rio’s internal aluminum operations will remain unaffected, according to the sources.
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