EDINBURGH — BHP, a multinational resources company listed in New York and the US, has been knocked by a bizarre incident in which one of its trains loaded with ore suddenly took off without a driver and sped 90km down the track before being forcibly derailed. The incident has raised questions about BHP safety systems and whether there have been breaches of rail safety laws. The Australian regulator is investigating. The runaway train could end up costing far more than the damages to the locomotive and tracks. An industry source has told Perth Now that BHP could lose 3-8 million tonnes of production depending upon how long its rail operations were offline. Industry sources, says Perth Now, have expressed bewilderment, suggesting several safety systems should have kicked in to stop the train including a so-called “dead man’s switch” that must be pressed at regular intervals by the driver to keep the train operating. The Financial Times said the damage caused to the train — capable of carrying 35,000 tonnes of ore worth $2.6m at current market prices — had been “significant”, raising questions about the wider impact on BHP’s iron ore business and the market. The Wall Street Journal says the rogue train tale sounds like a movie plot. – Jackie Cameron
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Train Stopping: BHP Derails Runaway Locomotive From 800 Miles Away
By Rhiannon Hoyle
(The Wall Street Journal) SYDNEY — It sounds like a plot from a movie: a train carrying tons of cargo barreling out of control and a mission to stop it.
But for BHP Billiton Ltd. BHP 0.71% it was real life, as four locomotives and 268 loaded wagons ran loose for more than 50 miles without a driver.
Monday’s journey was meant to be a regular rail movement from BHP’s iron-ore mines in Western Australia’s Pilbara region, where temperatures can top 100 degrees Fahrenheit in summer and vast distances separate communities. But when the driver disembarked to inspect one of the wagons loaded with ore, the train wasn’t properly secured and began to roll away.
It took off, and traveled about 57 miles in 50 minutes.
With the train out of control and headed toward Port Hedland, on Australia’s west coast, operators some 800 miles away in Perth took action. Using remote sensors to switch points at an isolated part of the Outback, they forcibly derailed the train in the desert without anyone being hurt.
In a statement, BHP said it was working to recover the rogue train from the desert some 75 miles from the coast — action that could take up to a week.
Still, the derailment disrupted the company’s operations and led to a 2.3% jump in iron-ore prices Monday as traders bet on reduced supply of a key ingredient in steelmaking. BHP suspended all of its rail operations while the circumstances that led to the train running loose are investigated by the Australian Transport Safety Bureau.
The derailment comes amid heightened scrutiny of BHP’s safety record since a deadly spill at its Samarco iron-ore venture with Vale SA in Brazil in late 2015. The disaster led Brazilian prosecutors to file a claim against BHP and its partner for several billions of dollars, among other lawsuits. BHP and Vale have agreed to settle some claims.
The Pilbara region accounts for roughly half of all iron ore traded by sea, with most of the cargoes feeding China’s industrialisation. BHP is the region’s second-largest producer of the commodity, after Rio Tinto PLC.
Global miners have been spending heavily to remove the human factor from a complex supply chain spanning thousands of miles across continents, part of a program to save billions of dollars and cushion profits against swings in commodity prices. That spending has included setting up remote operations centres far from mines where staff can monitor everything from trucks, drills and conveyor belts on giant screens and control them at the touch of a button.
For some companies, automated trains are the next big innovation. Rio Tinto PLC last month said it is using more automated trains in the Pilbara and expects to have all of its iron-ore trains operating without a driver on board by the end of this year.
BHP is taking a more patient approach to the technology, as it worries about congestion on the more than 800-mile rail network that it operates in the Pilbara. While it is using lasers to automate the track, it hasn’t given a timeline on how long it will be before it uses driverless trains.
Write to Rhiannon Hoyle at [email protected]
