Gold output at risk as OZ Minerals eyes long wait for full restoration of electricity supply

Lingering slowdowns are hurting operations at both groups’ flagship South Australian mines.

Aerial view of The Prominent Hill Mine, a major copper, silver and gold mine in north west South Australia, 130km southeast of Coober Pedy. (Picture: Bianca De Marchi)

BHP Billiton and OZ Minerals have both warned of lingering slowdowns to operations at their flagship South Australian mines following last week’s state-wide power outage.

In a statement this afternoon, mining giant BHP Billiton said its Olympic Dam operations remained under “care and maintenance”.

It did not offer guidance on the likely impact given normal operations were yet to resume.

“Olympic Dam is now receiving some power from the grid and with the additional generation capacity sourced and connected, this will ensure asset stability and integrity of the operation until full power is restored and operations can resume as normal,” BHP said.

“Production impacts will be provided in the operational review for the September 2016 quarter, scheduled for release on October 19.”

Earlier, OZ Minerals said it would be forced to wait another week until electricity transmission to its Prominent Hill copper and gold mine was fully restored, with its gold output now at risk of falling short of guidance.

Prominent Hill is about 200km northeast of Olympic Dam and around 700km north of Adelaide.

OZ Minerals announced last week that production had ceased after a wild storm caused a major blackout across South Australia.

Network provider ElectraNet said yesterday three out of four power circuits to northern SA remained out of service.

“If all goes well and things like weather, site access or soil conditions don’t slow or stop us, we hope to have one of the damaged circuits back up and energised, by the end of next weekend,” the group said.

“Another circuit should then follow, a couple of days later.”

Despite the lack of activity, OZ Minerals (OZL) reaffirmed its copper output guidance for the full year, although its gold output could test the lower bound of its forecast.

“The company reiterates that the time frame for full restoration of power to Prominent Hill is ultimately outside of its direct control,” the miner said in a statement.

“Production at the open pit operations remains unaffected. The underground mine has now resumed limited operations.”

At this stage the processing plant is on standby, with the production of concentrate to resume only once full power is restored.

At the closing bell, OZ Minerals shares slid 1 per cent to $6.02, while BHP advanced 1.7 per cent to $22.75, as against the broader market’s 0.7 per cent gain.