UPDATE: BHP Billiton's Olympic Dam Mine Hit By Outage
October 07 2009 - 12:39AM
Dow Jones News
BHP Billiton Ltd. (BHP.AU) said Wednesday a mechanical failure
has shut down the main haulage shaft used to extract ore from its
underground Olympic Dam mine in South Australia state.
Analysts said the outage was unlikely to have a significant
impact on BHP's earnings but could potentially have an affect on
sentiment in a copper market that is already supply
constrained.
BHP said a mechanical failure late Tuesday damaged the Clark
shaft, which is the main shaft hauling ore from the underground
copper, gold and uranium mine to the surface for processing.
A secondary haulage system, which has less capacity than the
main system, continues to operate and a spokeswoman said it is too
early to say what impact the incident may have on production.
No one was injured in the incident and BHP said it is
investigating the cause of the failure and the extent of the
damage.
"The safety of our workforce will take priority in determining
any restart of haulage operations," the miner said in a
statement.
ABN Amro analyst Warren Edney said the outage was unlikely to
hurt BHP's earnings to any significant degree but that it could
potentially affect sentiment in commodity markets, even though the
mine is not a major producer of copper.
Olympic Dam produced 194,100 metric tons of copper in the
financial year ended June 30, representing only about 1.1% of
global production.
It is a more globally significant producer of uranium, with its
output of 4,007 tons of yellowcake in fiscal 2009 representing more
than 7% of global mine production.
BHP is planning to transform Olympic Dam into the world's
biggest open pit mine, upping annual copper output to 730,000 tons
and uranium to 19,000 tons, in a major expansion tipped by analysts
to cost about US$15 billion.
-By Alex Wilson, Dow Jones Newswires; 61-3-9292-2094;
alex.wilson@dowjones.com