21 February 2013

Mozambique: Rio Tinto Also Declares "Force Majeure"

Maputo — The mining company Rio Tinto on Wednesday declared the interruption of its coal mining operations at Benga, in the western Mozambican province of Tete, for reasons of “force majeure”.

“Force majeure” is the legal term used for events caused by natural factors, rather than by human behaviour. Contracts often contain clauses which allow the parties to the contract to breach its terms, if they can show that an even of “force majeure”, beyond their control, has occurred.

Rio Tinto declared that the event forcing it to suspend operations is the interruption to rail traffic along the Sena Line, from the Moatize coal basin to the port of Beira, caused by the torrential rains falling in the Zambezi Valley.

Ballast has been washed away from a section of the line, and until that problem is solved, no trains can use it. Unable to send coal to port, Rio Tinto has opted to cease mining, rather than simply allow coal to accumulate at the pit head.

Rio Tinto noted that the owner of the Sena line, Mozambique’s publicly owned ports and rail company, CFM, “is making efforts to re-establish rail traffic as quickly as possible”.

Rio Tinto is the second mining company to declare that “force majeure” has impeded its operations in Tete. The Brazilian company Vale declared “force majeure” on Tuesday, and announced that it was contacting its clients informing them that the torrential rains in central Mozambique have made it impossible to send coal trains to the port of Beira.

Although plans for new railways are on the drawing board, currently the only way of taking large quantities of Tete coal to port is the Sena line.

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