Page last updated at 10:29 GMT, Friday, 5 September 2008 11:29 UK

BHP stops ore output after deaths

BHP's iron ore loading facility at Port Hedland in Western Australia
Global demand for iron ore means mines are working flat out

Mining firm BHP Billiton has suspended all iron ore production in Western Australia after the deaths of two workers in the space of ten days.

A worker at the Yandi mine, in the Pilbara region, was killed on Thursday following a collision between a light vehicle and a haul truck.

This followed an earlier fatality at the mine, run on BHP's behalf by HWE Mining, at the end of August.

BHP accounts for 10% of global output and there are fears prices could rise.

Global imbalance

Intense demand for iron ore from China has driven prices up sharply in the past year, enriching BHP Billiton and other mining firms.

The current imbalance between global supply and demand means that any prolonged interruption to output from a major regional market could potentially force prices up.

If the mines remained closed for longer periods, say a week or more, then that could cause some issues
James Wilson, Carmichael & Co

BHP has suspended iron ore operations in the region until further notice and is working with officials from the Mine Safety Directorate who are investigating the causes of the fatal incidents.

It said it had taken the decision in the interests of its employees' safety.

"They're [the deaths] very upsetting to all the employees, obviously, and we didn't want to run the risk that any of them could be distracted," a company spokesman said.

"That could put any of them at risk."

Wealthy region

After previous fatal incidents, mines re-opened after one or two days.

Analysts said the length of time the mines were out of service would determine the impact on prices.

"If it is a day or two that won't cause much of a ripple but if the mines remained closed for longer periods, say a week or more, then that could cause some issues," said James Wilson, from Carmichael and Co.

The mining industry has brought considerable wealth to the isolated Pilbara region. BHP employs about 8,000 staff there.

BHP's iron ore mines in Australia and Brazil accounted for 14% of its total profits last year, generating $5.5bn in sales.

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