BHP to focus on rail upgrades following runaway train

Image: BHP.

BHP chief executive officer Andrew Mackenzie says the company will continue to invest in its rail structure in light of Monday’s derailment of an iron ore train in the Pilbara, Western Australia.

The CEO, speaking alongside chairman Ken Mackenzie at BHP’s 2018 annual general meeting in Adelaide this morning, made the comments in response to a question about the derailment.

“Will you increase the money allocated to upgrading infrastructure for rail in Port Hedland so that the accidental derailment in Port Hedland does not occur again?” the audience member asked.

Andrew Mackenzie replied: “Straight answer: yes, we will continue to invest to make our railways — as in line with all of our operations — safer.

“Before this accident happened we already had in plan a number of investments. I don’t want to speculate too much on the cause of this [accident] but I want to be clear — and I’m being a little bit cute with my words here — it was actually a deliberate derailment, it didn’t happen by accident.

“We lost control of the train through an issue with the systems that we’re actually trying to get to the bottom of right now and the very swift thinking of the people on shift at that time realised that if they didn’t force the derailment of this train they could have caused an awful lot more damage and it could have been a real safety risk.

“They threw the points at a time when they knew it was moving quickly to derail the train and stop it before it damaged anybody.”

Andrew Mackenzie reinforced that nobody was hurt because of the incident.

“I know people will be listening to me and trying to figure out what the impacts of this all will be,” he said.

“We have about 130 people working night and day to get things back to normal and we are reasonably confident that we can resume our shipments within about a week. Of course, that’s very important.

“In the meantime, mining continues, as does our shipment through supplies at the port, and once we get it back up and running then we will obviously move quickly — but safely — in order to restore that production and satisfy our customers as quickly as we could.”

Both Ken MacKenzie and Andrew Mackenzie reiterated the company’s commitment to safety in their respective speeches, particularly in relation to site fatalities that occurred in the last year.

Neither executive, however, mentioned the train derailment until the audience member asked them about it.

Andrew Mackenzie, meanwhile, revealed a notable development in regards to the area that was damaged in the Samarco dam disaster in Brazil in 2015, resulting in the displacement of thousands of residents and tens of billions of dollars in damage.

BHP and Vale allegedly finalised their compensation agreement with state prosecutors from the Minas Gerais region of Brazil at the start of October.

Mackenzie said he expected all resettlements to be completed by 2020. He also said the non-profit Renova Foundation set up in the wake of Samarco to deal with the cleanup had distributed 10,000 financial assistance cards to people whose lives were impacted by the dam failure.

The CEO added the next 3000 hectares of a planned 40,000 hectares of redevelopment would be completed within the next calendar year.

He also cited the company’s continued focus on the streamlining of its assets, including the divestment of its onshore US assets in the past year. The company has reduced its number of operational assets from 30 three years ago to 13 today.

BHP also stressed its endeavours towards greater female representation in the company. Andrew Mackenzie said, “The industry’s poor track record is something we are determined to change and lead.”

The company is attempting to achieve gender balance by 2025 and ran an apprenticeship program at the Olympic Dam copper operation in South Australia that saw 53 per cent female participation.

It is encouraging more women to join the company through increased work flexibility for example, with the hiring ration having increased from 10 per cent to 40 per cent in three years.

“We’ve achieved a 5 per cent increase in female participation in the BHP workforce [over the year],” Andrew Mackenzie said.

“That equates to 2000 more women employed at BHP who will be given every opportunity to take leadership roles and steer our industry into the future.”