BHP’s Olympic Dam facing two-week outage

BHP faces an uphill battle to hit copper production targets at its Australian operations with its flagship Olympic Dam mine out of action until at least the start of November.

A copper smelter at BHP’s Olympic Dam. Picture: Ben Clark

BHP faces an uphill battle to hit copper production targets at its Australian operations with its flagship Olympic Dam mine out of action until at least the start of November.

The mining giant said mining Olympic Dam would be halted for about 14 days, much longer than first hoped, in the wake of wild electrical storms that hit northern South Australia on Thursday night.

BHP has not changed its copper production guidance and has not provided an estimate on the cost of the outage.

A similar outage at Olympic Dam in 2016 cost the company $137m.

The South Australian government speculated last week that Olympic Dam would be out of ­action for between five and seven days, but BHP said it would take much longer to restore power supply from two badly damaged transmission lines.

Once the power supply is restored, it may take another week to get the operations back up to capacity.

In the meantime, BHP has sent some of its Olympic Dam workforce home on full pay and is starting maintenance work on the smelter.

BHP is using back-up diesel generators to supply power to Roxby Downs, which is home to most of its workforce, the Olympic Dam airport, accommodation villages and critical mine infrastructure.

“The majority of Olympic Dam surface plant and underground mining operations have been paused,” a BHP spokeswoman said.

“BHP will proceed with planned smelter maintenance works from this week to make productive use of the unplanned downtime.”

BHP said it was working with South Australian poles-and-wires company ElectraNet and infrastructure company Enerven to work out the scope and timing of repairs to the transmission lines.

“Based on that work, we estimate it will be approximately 14 days from the initial outage to restore power to Olympic Dam and Roxby Downs,” the company spokeswoman said.

Last week’s storm destroyed multiple towers supporting the transmission lines that supply Olympic Dam.

BHP has told the market its mines in South Australia will produce 310,000-340,000 tonnes of copper in 2024-25.

There has been no disruption at the Carrapateena and Prominent Hill mines.

Barrenjoey analyst Glyn Lawcock said it was possible that BHP could make up for lost ­production across the mines over the remainder of 2024-25 and hit its wide-range production guidance.

However, Mr Lawcock said every lost tonne of copper would hurt BHP’s bottom line, due to the healthy copper price.

It is estimated the extended outage could lead to a 12,000-tonne production hit.

Originally published as BHP’s Olympic Dam facing two-week outage