SA power cuts hit business
This week’s South Australia’s power outage and severe weather conditions has left insurers tallying the cost as businesses cut back their operations.
BHP Billiton was forced to temporarily shutter operations at its flagship Olympic Dam operations in the wake of the power failure caused by ferocious storms that damaged a power station and at least 20 transmission towers.
BHP Billiton said it was unable to continue mining despite the critical backup power generators kicking into gear.
“Following the loss of power in South Australia, Olympic Dam was able to safely shut down,” BHP said.
“Back-up generators are currently providing power to critical infrastructure and will allow a restart of operations when power is restored.”
ASX-listed copper and gold miner Oz Minerals closed operations at its Prominent Hill Mine and said it still had to determine when it could resume mining.
“The company has not yet received any definitive timeline as to when power will be restored to the site as suppliers determine the full extent of damage to their transmission networks,” Oz Minerals said.
“The Prominent Hill site itself has suffered no damage and its generators are providing power for all essential services.”
The state wide blackout crippled Arrium’s Whyalla steelworks.
Arrium administrator Mark Mentha said operations had come to a screeching halt at the plant.
“We’re having issues with the blast furnace, without power it will continue to cool down,” Mr Mentha told the Whyalla News.
“No gas is being pumped into the pellet plant – which impacts the kiln.”
“We also have four ladles full of molten steel that could solidify without power being restored.”
Mr Mentha said it could be up to a week before power is restored.
BHP Billiton, Oz Minerals and Arrium didn’t quantify losses but Swiss based Nyrstar NV said it could massive costs after its 185,000-tonnes-per-year Port Pirie lead smelter was seized up.
The company said repairs to a blast furnace, damaged when power was lost and slag solidified, could see it losing “three to five million euros”.
“It is expected that the blast furnace will be down for approximately 10 to 14 days for repairs,” Nyrstar said.
AGL said it was now assessing the situation.
“AGL notes the unprecedented scale of the blackout and the potential for further severe weather in South Australia,” the company said.
“While ongoing assessment of the situation will be required, at this stage, AGL does not anticipate any material financial impact as a result of the outage.”
The Insurance Council of Australia said it was monitoring the impact and liaising with state and local governments, agencies and the emergency services.
“Reports to insurers indicate largely low-level damage to property across a very widespread area, though it will take several days for a more complete picture to emerge,’’ the ICA said.
“Insurers are also watching the impact of extreme weather passing across south-eastern Australia for its impact on properties, in particular in areas affected over the past week by flood and storm damage.”
by Leon Gettler, September 30th 2016
