Saturday , May 8 2021

BHP suspends Australian freight trains after the exit

The iron ore price of iron-based ingredients could remain high if BHP was for a longer period of time forced to suspend exports from its business in Australia for damage caused by a frozen cargo train.

BHP suspended all its rail operations on remote Pilbara Northwestern Australia on Monday after it had been forced to remove a loaded mining train.

The Australian Transportation Safety Office said the train, consisting of four locomotives and 268 wagons, traveled nearly 100 miles without a driver before it was finally stopped.

He said rail damage – capable of carrying 35,000 tonnes of ore worth $ 2.6 million at current market prices – was "significant", questioning the wider influence on BHP's iron ore and market operations. The train finally came out of the set of points about 120 km from Port Hedlanda, the world's largest iron ore loading plant

"Based on the distance from Port Hedland, it seems that the vast majority of Pilbare BHP production would be affected," said Edward Sterck, analyst BMO Capital Markets. "If there is significant damage to the track, it may be that train loads and speeds may be limited after repairing and restarting the shipment."

The price of iron ore has increased over the last few weeks, rising to more than $ 75 per ton, as Chinese steel mills turned production to meet robust demand and raw material stocks before the winter. The gains were in sharp contrast to the performance of industrial metals such as copper and nickel, which continued to decline due to the fear that the US and China trade war could destabilize global economic growth.

"BHP represents around 20 percent of the global supply of marine iron ore. If the suspension is long, it could be in favor of other producers if iron ore prices react positively to a decline in market supply, although we would expect a slowdown in demand during Chinese winter stoppages," said Sterck .

BHP's iron ore mines in Western Australia are the most important source of revenue for the company, which last year's interest, taxes, depreciation and depreciation accounts for nearly 40 percent of the profit group.

The Pilbari operation consists of four manufacturing hubs and five mines linked to more than 1,000 km of railway infrastructure and port facilities. The Mount Newman track lasts more than 400 kilometers, linking the mines to Port Hedland.

In a recent update, BHP said it expects to produce between 273m and 283m tonnes of iron ore in the year to June 2019, a forecast that could be a threat if the damage caused by the exit is significant.

BHP said in a statement: "The iron ore ferry of Western Australia was thrown off at Turner on the way to Port Hedland this morning, and no one is hurt, we are working with the appropriate authorities to investigate the situation."

ATSB announced that the cargo mines train traveled on Monday at the BHP Newman rail to Port Hedland when the driver came out of his cabin to inspect the wagon.

Before he could return, the train began rolling. With no one on board, the train traveled nearly 100 miles before deliberately slamming staff at the BHP remote control center in Perth.

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