BHP blocks details of shaft shutdown

BHP Billiton is yet to offer specific details of the haulage system breakdown at Olympic Dam.

Industry analysts have suggested that output at BHP Billiton’s Olympic Dam could be severely hampered for up to six months after Tuesday’s system malfunction in the mine’s primary ore shaft.

BHP has refused to say whether the accident is likely to affect the mine’s production.

The company has offered no information beyond confirmation that investigations have begun into the reason behind the breakdown of a haulage system in the Clark Shaft, and that ore is now being brought to the surface via the secondary Whenan Shaft.

Speculation has been that the accident was caused by a falling skip and that the damage is significant.

“Assuming it was a falling skip, it is like going up a high city building and dropping a 20 tonne truck from the top,” Goldman Sachs JBWere analyst Neil Goodwill told MINING DAILY.

“In the worst case scenario I think the shaft could be out for six months.”

Olympic Dam is Australia’s largest mine and produces around 200,000 tonnes of copper, 4000 tonnes of uranium and 130,000 ounces of gold a year which would be valued at around $1.9 billion at current spot prices.

The mine’s alternate Whenan Shaft is believed to have only 20% of the capacity of the Clark Shaft, and analysts believe such a major gap in production would have a major impact on BHP’s earnings.

The potential loss of six months of production would be of particular concern to BHP’s uranium business.

Olympic Dam’s 4000 tonne annual output represents around 5% of global uranium supply.

“Obviously if you take 5% of total supply out of the market that is not immaterial,” Goodwill said.

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