BHP reveals $838m hit from runaway train, other 'unplanned' outages


Mining giant BHP has revealed a freight train derailment in Western Australia, a plant outage in South Australia and a mine fire in Chile will cost the company $US600 million ($838 million) for the first half of the 2019 financial year.

But the world's biggest miner told shareholders on Tuesday it remained on track to meet its yearly production forecasts across all its major commodities despite the "negative impact" of the series of incidents over the past six months.

"Production in the first half was broadly in line with the prior period despite planned maintenance and outages," BHP chief executive Andrew Mackenzie said.

Delivering an operational review on Tuesday, BHP said production guidance remained unchanged for petroleum, iron ore, metallurgical coal and energy coal, while its copper production guidance increased due to the decision not to offload its Cerro Colorado mine in Chile.

BHP's full-year productivity guidance, however, had been placed under review, the company said, due to the unplanned outages across its operations in Australia and Chile.

"Revised guidance will be provided in the December 2018 half-year financial results," the company said.

A BHP train travelling between the Pilbara and Port Hedland.

A BHP train travelling between the Pilbara and Port Hedland.Credit:Erin Jonasson

BHP, in November, was forced to deliberately derail a runaway train loaded with iron ore in Western Australia's remote Pilbara region, which severed the crucial rail link between its mines and shipping hub in Port Hedland, and disrupted exports of its most lucrative commodity.

The BHP train, consisting of four locomotives and 268 wagons filled with iron ore, was derailed by BHP’s remote operations centre. It had been travelling from Newman to Port Hedland when the driver disembarked at a siding to inspect an issue with an ore car, before the train started moving by itself.

BHP told shareholders it produced 58 million tonnes of iron ore in the December quarter, down 6 per cent compared to the same period in 2017.

BHP's intended productivity gains were also affected by an unplanned acid plant outage at its Olympic Dam mine in South Australia in August and a plant fire at its Spence mine in Chile in September.

Shares in BHP dipped 0.7 per cent following the announcement on Tuesday morning, trading at $72.54.

Also in the past six months, BHP completed the sale of its onshore oil and gas assets in the United States and returned $US5.2 billion to investors through a share buy-back program, Mr Mackenzie said.

A further $US5.2 billion is set to be returned to shareholders as a special dividend on January 30.