Derailed train crashes into BHP punching $600m hole in miner’s accounts

Anglo-Australian miner BHP dropped today as it warned that disruptions in its copper and iron ore mines would take a $600m (£463) chunk out of the company’s books.

Investors were also left uncertain when the groups said that iron ore production had fallen nine per cent in the second quarter.

An outage in the acid plant at the Olympic Dam mine, a fire at the Spence project and a train which derailed at Western Australia Iron Ore in November, had a total negative impact of around $600m, the company said.

However the miner also increased production forecasts to between 1.6m to 1.7m tonnes after the planned sale of its Cerro Colorado copper mine fell through.

“BHP flagged that its productivity has been negatively impacted by lower than expected volumes, exposing its 2019 financial year productivity guidance which is currently under review, to further downside risk,” said Wan Nurhayati, an equity analyst at CFRA Research.

“Separately, BHP plans to return the balance of net proceeds from the onshore US assets sales to shareholders via a special dividend.”

Iron ore output fell to 66m tonnes in the quarter, compared to 72m year ago, BHP Group said.

“Yes, iron ore output might have been a little softer but overall I’d say production was broadly in line,” a fund manager told Reuters.

“I’d think about the $600 million as more of an opportunity cost that we knew about from earlier in the quarter.”

Shares closed down around two per cent to 1,580p.