BHP's Olympic Dam U308 Output Slashed by Recent AcHere is an article posted on October 7th on Cameco's Yahoo MB.
This accident has prompted speculation that the Uranium spot price will soon rise significantly with worldwide ripple effects:
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The Australian
Accident slashes Olympic Dam output
BHP Billiton's giant Olympic Dam underground mine in South Australia could be running at less than half capacity for months after a mechanical failure sent a full load of ore plummeting to the bottom of its 800m-deep main shaft.
BHP is tight-lipped about the incident at the country's largest underground mine. The incident could result in suspension of the lion's share of Olympic Dam's sales of copper, uranium and gold, worth $150 million a month at current spot prices.
The miner would not comment on what happened at the mine, apart from saying the haulage system in its Clark shaft was damaged by a mechanical failure at about 10.30pm local time on Tuesday night and a secondary haulage system was operating.
The Clark shaft brings almost all of Olympic Dam's ore to the surface.
Industry sources said there had been substantial damage to the inside of the shaft and to the gears and wheels that bring the ore to the surface.
They also said the loaded ore skip that fell had sent another skip on a linked cable hurtling up into the headframe at the top of the Clark shaft.
No one was injured in the malfunction, as the haulage system is fully automated.
The extent of the damage could mean the shaft is out of action for months and the mining giant will have to rely on a much smaller shaft, known as Whenan. It is believed to have less than half the capacity of the Clark shaft to lift ore to the surface.
BHP would not comment on the capacity of the Whenan shaft or how much ore it had stockpiled at the surface that it could put through the smelter while the Clark shaft was out of action.
Olympic Dam was acquired in BHP's 2005 takeover of WMC Resources.
The shutdown of the mine's main shaft will end a two-year run of record production at an operation that has always struggled to run at capacity.
It comes as production is down at BHP's biggest copper mine, Escondida, in Chile.
Shortly after it acquired Olympic Dam, BHP told analysts its underground railway and hoist were among several problems that needed fixing and that a major upgrade was under way.
Yesterday, BHP would not say whether that upgrade had been completed or whether the comments related to the Clark shaft.
Last year, Olympic Dam's skips hoisted a record 9.83 million tonnes of ore to the surface. The mine produced 194,000 tonnes of copper, 4007 tonnes of uranium and 108,039 ounces of gold last year, which would have a combined value of about $1.9billion at current spot prices.
As well as affecting BHP's sales, a sustained outage could provide support to global copper and uranium prices, analysts said.
Uranium, which is sold mainly on long-term contracts, would be the most sensitive if BHP or its customers were forced to buy on the sector's small spot market.
In recent years, BHP has been forced to buy uranium on the spot market to make up shortfalls.
The failure at Olympic Dam comes as BHP is planning a massive expansion next decade that could cost $22bn and would eventually create the world's biggest open-cut mine.
BHP, which did not report the incident to the stock exchange, ended $1.16, or 3.2 per cent, higher at $37.81. Rival Rio Tinto finished $3.02, or 5.2 per cent, higher at $60.75.