Two mining giants are re-routing shipments and turning to trucks to deal with disruptions from a Canadian railway stoppage that threatens to undermine the industry’s operations.
Rio Tinto Group will rely on trucking and increase usage of its own railway between Quebec and Newfoundland and Labrador to ship and receive raw materials, the company said Thursday in an emailed statement. Rio produces aluminum, iron ore, diamonds and titanium in Canada.
Canada’s mining sector depends on the country’s two dominant railways to transport heavy materials including copper, aluminum, iron ore and coal. Mining is an important contributor to Canada’s resource-heavy economy, and the goods it produces and exports are key to other industries, as well as the global transition to cleaner energy sources.
Canada’s two main rail companies — Canadian National Railway Co. and Canadian Pacific Kansas City Ltd. — shut down early Thursday after talks with union leaders failed, immediately blocking arteries of North American supply chains that carry about $740 million per day in trade.
“The mining industry is the Canadian rail system’s most significant customer, and the majority of our products are shipped to international customers,” the Mining Association of Canada said in a Thursday statement, calling the stoppage “catastrophic” for Canada.
“Work stoppages bring immense additional operational costs to businesses and reduce confidence in Canada as a destination for investment for supply-chain reliant businesses, such as mining,” association head Pierre Gratton said in the statement.
