'Force majeure' on BMA operations

BHP Billiton has warned ongoing union action could affect its profits and coal exports in its latest announcements released on Wednesday.

The mining giant has had seven coal operations in Central Queensland mired in an industrial relations dispute with a trio of mining unions for 16 months, with work grinding to a halt or restarting with little notice.

Its nine-month production report showed it to have increased coal production by 10 per cent compared to the same time last year when much of Queensland was inundated

The sites were exporting 14 per cent less coal compared to late last year as strikes and poor weather again hindered its operations.

In the past 12 months, BHP has exported 25 million tonnes of coking coal from the seven mines.

Both the union action and violent weather forced the company to impose a "force majeure" on its BMA operations.

The force majeure allows the company to not meet buyer contracts when it is affected by issues outside its control.

The report explains that union action had "severely depleted" its coal inventories, risking exports.

It found, "The extent to which industrial action will continue to affect production sales and unit costs is difficult to predict.

"However with inventories severely depleted, the impact on future quarters may be significant.

"Force majeure was declared across all BMA sites in April 2012 and remains in place."

Topics:  bhp billiton, bma, force majeure




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