Rio Tinto Declares Force Majeure on Canadian Aluminum Sales

(Bloomberg) -- Rio Tinto Group declared force majeure on its aluminum shipments from its Canadian operations as a result of backlogs created by a week-long rail strike.

“The current situation constitutes an event of force majeure under the terms of the sales arrangements we have with you for aluminum sourced at our Canadian operations,” Rio Tinto said in a letter to customers seen by Bloomberg News. “Our ability to deliver under sales arrangements in accordance with volumes and schedules agreed to prior to the rail strike may be affected.”

The week-long rail strike that began Nov. 19 at Canadian National Railway Co. halted shipments of metals, oil, grains and potash. Operations are expected to return to normal Wednesday after the union reached a tentative deal with the company.

“Rio Tinto declared force majeure on contracts prior to Canadian National Railway confirming the strike was ending,” the company said in an email to Bloomberg News Tuesday. “We are working closely with customers to minimize any impacts as services resume.”

The force majeure notice confirms the warning last week by supply-chain management and consulting company Mercury Resources that aluminum deliveries from Quebec into the U.S. will likely be delayed as the strike results in backlogs.

Last week, the Union Pacific Corp., the largest freight rail provider in the U.S. West region, said it stopped accepting shipments into or from CN Railway’s Canada locations until CN operations return to normal.

To contact the reporter on this story: Joe Deaux in New York at jdeaux@bloomberg.net

To contact the editors responsible for this story: Luzi Ann Javier at ljavier@bloomberg.net, Steven Frank

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