Olympic Dam Force Majeur Affects Global Copper Output

22 October 2009 (Last Updated October 22nd, 2009 18:30)

Damage to BHP Billiton's Olympic Dam copper / uranium mine in Australia has caused it to declare a force majeure, with output likely to see an impact. On 6 October the automated haulage system at the mine's Clark Shaft, which is the main system used to transport underground ore to the s

Damage to BHP Billiton's Olympic Dam copper / uranium mine in Australia has caused it to declare a force majeure, with output likely to see an impact.

On 6 October the automated haulage system at the mine's Clark Shaft, which is the main system used to transport underground ore to the surface for processing, broke down during operations.

According to industry sources, a loaded ore skip fell down the shaft, causing damage to the shaft and the gears and wheels that convey the ore to the surface, according to Mining Daily.

Hoisting was ongoing at the secondary Whenan Shaft, however, this would produce only 25% of capacity for the third quarter of the 2010 financial year.

Macquire Bank was quoted by Reuters as saying that the global copper market could lose roughly 50,000t of supply in 2009 due to the failure.

BHP's copper production in the September quarter declined by 8% to 283, 900t due to maintenance activities at Olympic Dam and Escondida in Chile.

The company also cautioned that the Olympic Dam damage would adversely affect uranium production as it was expected that the Clark shaft would not be operational for up to six months.

"We have advised affected copper and uranium customers of a force majeure on contracts and we expect to return to full production in the third quarter of the 2010 financial year," BHP said.