BHP halts Port Hedland operations after fatality

Thu Jul 7, 2011

* BHP halts iron ore operations after fatality
* Port Hedland Authority says port still open for other users
* BHP cannot say when its operations will resume
* Traders say incident could support iron ore prices

By James Regan

SYDNEY, July 7 (Reuters) - Global miner BHP Billiton has suspended port and rail operations at the Port Hedland iron ore terminal in Western Australia after a fatal incident, the company said on Thursday.

The port, one of the world's largest for exporting iron ore, remained open for business to other users, which include Fortescue Metals Group and Atlas Iron , a spokeswoman for the Port Hedland Port Authority said.

BHP Billiton, which ships more than 150 million tonnes of iron ore annually from Port Hedland and is the biggest customer of the public facility, said operations would be halted until further notice.

"The onsite emergency team has been activated and external emergency services including police are attending the scene," BHP Billiton said in a statement.

"At this stage we are unable to provide any further detail about the incident, but will do so as soon as possible during the day."

Contacted several hours after BHP Billiton released its statement, a company spokeswoman declined to make further comment pending findings of the investigation underway.

Commodities traders suggested the incident could give lagging iron ore prices a lift, though spot market indices had yet to register any increases.

"I expect it to be supportive of prices, at least for the short term," a trader in Singapore said.

Spot iron ore prices .IO62-CNI=SI were trading steady near $170 a tonne, only slightly above last month's three-month lows.

Troy Flannery, a senior mining analyst for stockbroker DJ Carmichael in Perth, said he expected the suspension to last about two days, based on similar incidents in the past that have disrupted operations at Australian iron ore mines.

A typical BHP Billiton ore train is about a mile long and consists of 300 cars hauling 24,000 tonnes of ore hundreds of miles across the Pilbara iron belt to waiting freighters at the port.

On average a trainload leaves at least one of BHP Billiton's seven mines every hour day and night.

There is currently one freighter berthed in the port designated to carry iron ore, the 171,039-deadweight tonne "F Duckling", according to the authority's website. There are no details of the Panama-registered ship's destination or work order.

Unlike some other producers of bulk commodities that operate their own fleets of freighters, such as Vale and Rio Tinto , BHP Billiton, Fortescue and Atlas rely on independent shipping services.

The lion's share of BHP Billiton's iron ore is sold to steel mills in China and Japan.

BHP Billiton, the world's No.3 iron ore miner, ships all its ore via Port Hedland and each month accounts for the majority of the roughly 18 million tonnes shipped from the port.

Rio Tinto, the world's No.2 iron ore miner behind Vale, uses its own rail line does not ship ore to Port Hedland.