BHP running out of iron ore stockpiles after Pilbara train crash
BHP says it will run out of iron ore stockpiles before its Pilbara rail network is fixed after from Monday’s train derailment.
Mining giant BHP says it will run out of iron ore stockpiles before its crucial Pilbara rail network is back up and running, adding further pain to the fallout from Monday’s disastrous train derailment.
In an update issued by the company yesterday, BHP said stockpiles at Port Hedland on the Pilbara coast that were being used to maintain shipments were not expected to cover the entire period of the outage.
A fully laden ore train carrying 280 wagons travelled almost 100km out of control across the Pilbara on Monday morning after the driver left the cabin to inspect an issue with one of the wagons. It was deliberately derailed by BHP around 50 minutes later.
No one was injured in the incident. Around 130 people are now working on site to clean up the wreckage of the derailed train and repair the 1.5km of train track damaged in the incident.
BHP has estimated it will take about a week to resume some rail operations.
BHP’s Pilbara iron ore operations are the company’s single biggest source of profits, generating an average of just under $US25 million ($34.4m) of underlying earnings each day last financial year.
It has been relying on stockpiles already sitting at Port Hedland to maintain shipments, but has now has started discussions with customers over contractual commitments that now look unlikely to be met.
The use of stockpiles at the port to meet shipments will also leave BHP with little buffer ahead of the Pilbara’s annual cyclone season.
Investigators from the Australian Transport Safety Bureau and the Office of the National Rail Safety Regulator are at the site looking into the cause of the incident. The ONRSR has the power to issue fines of up the $3m if companies are found to have breached rail safety laws.
The investigation will centre on how the train managed to take off while the driver was out of the cabin, and why safety measures such as the “dead man’s switch” failed to automatically force the train to stop.
“We cannot speculate on the outcome of the investigation. However, we are working with the appropriate authorities and our focus remains on the safe recovery of our operations,” a spokeswoman for BHP said.
The incident has raised a host of questions about the cause of the accident, given train networks feature a host of systems and procedures aimed at preventing such an event.
Iron ore miners and other companies operating heavy haulage rail networks have been reviewing their own operations in the wake of the accident to ensure they are not at risk of a similar catastrophe.
A spokeswoman for the Gina Rinehart-controlled Roy Hill iron ore mine said it would review any findings from the incident to see whether there were any implications for its own operations.
“On the information available, Roy Hill does not believe we have an immediate concern — as we understand it, we operate with different safety systems — but we will ensure that our operations continue to comply with requirements of the ONRSR, including any additional requirements that result from this incident,” the spokeswoman said.