BHP declares force majeure at Olympic Dam

BHP Billiton has declared a force majeure on copper and uranium contracts after damage to the main shaft at its Olympic Dam site.

BHP Billiton has declared a force majeure on the copper and uranium contracts from its Olympic Dam site in South Australia after major damage to its primary shaft two weeks ago.

The miner said it has advised customers that the primary Clark shaft will be out of action for up to six months.

“We have advised affected copper and uranium customers of a force majeure on contracts and we expect to return to full production in third quarter of the 2010 financial year,” a BHP spokesperson told MINING DAILY.

A force majeure is a contract clause that frees a producer from liability after an event that is beyond its control.

In its latest quarterly report, released yesterday, BHP said that ore hoisting operations at Olympic Dam will be running at around 25% capacity until full production resumes at the beginning of next year.

Without use of the Clark shaft, Olympic Dam will be using its secondary Whenan shaft.

According to BHP, preliminary investigations have shown that the damage in the shaft was due to a malfunction of the hoist system.

Industry sources believe a loaded ore skip fell in the shaft, causing damage to the shaft itself, as well as to the gears and wheels that bring the ore to the surface.

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