Olympic Dam shaft accident proving costly

The hoist accident at BHP's Olympic Dam mine may cost the company up to US$200 million in lost profit.

The hoist failure at BHP Billiton’s Olympic Dam mine last October may end up costing the company as much as US$200 million in lost revenue.

The accident, which saw a skip loaded with ore fall down the mine’s primary Clark shaft, was believed to have been cause by equipment failure.

The shaft has since been running at 25% capacity.

Speaking during a media teleconference this week, BHP chief executive Marius Kloppers said that repairs and commissioning are likely to take several months.

“Our view is that the repairs will be completed at the end of the first quarter and that we will re-start the shaft at that time with a progressive ramp up, perhaps, over the three months after that,” he said.

Kloppers estimated that the accident has already cost the company around US$115 million in ‘idle capacity cost.’

That loss was established during the December quarter, but with the shaft expected to be operating at reduced capacity until the end of the June quarter, total costs may ultimately reach as much as US$200 million.

According to BHP spokeswoman Kelly Quirke, investigations into the accident have been largely completed.

“Detailed investigations by the company, with a third party independent expert, have found that a fault in the logic of the braking system was the root cause of the accident,” she told MINING DAILY.

“The fault prevented the system’s breaking mechanism from engaging fully, which in turn allowed the hoisting system to freefall to the bottom of the shaft.”

Operator failure has been ruled out as a cause of the accident.

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