The shares jumped following a surge in global iron ore prices on Friday, with a key industry benchmark price jumping 3.8 per cent to $US87.05 for a tonne of iron ore delivered to China.
Fortescue shares rose 4.5 per cent to close at $7.43 on Monday, its highest closing price since 2008. BHP shares rose 1.5 per cent to close at $39.05, the giant miner’s highest closing price since 2011.
Iron ore prices have climbed this year due to uncertainty surrounding supply of the commodity, in the wake of a fatal dam collapse at an iron ore mining operation in Brazil. The incident is expected to curtail the iron ore production of Brazilian miner Vale by tens of millions of tonnes.
One of the factors that affected the iron ore price rise on Friday was the first confirmation from Rio last week that it had “issued force majeure notices to certain customers,” because of damage to its operations caused by tropical cyclone Veronica.
On Monday the miner said that while its Pilbara iron ore operations were resuming after the cyclone, the event had damaged its Cape Lambert A port facility.
“As a result, Rio Tinto has declared force majeure on certain contracts and is working with its customers to minimise any disruption in supply,” the miner said.
Rio said the impact of the cyclone, combined with damage caused by a fire at the Cape Lambert A facility earlier this year, would result in lost production of about 14 million tonnes.
“As a result Rio Tinto’s Pilbara shipments in 2019 are expected to be at the lower end of the 338 and 350 million tonnes (100 per cent basis) guidance provided,” Rio said.