- BHP safety processes reviewed after famous runaway train incident in November 2018
- Macquarie thinks BHP shareholders will get a dividend shower after Woodside Petroleum merger clears
- Materials gains 0.24% as enthusiasm fades in afternoon trade
You may remember where you were the morning in late 2018 when a nearly 3km long train went loco at BHP’s (ASX:BHP) Pilbara iron ore operations.
The Australian Transport Safety Bureau certainly does at least. It’s just handed down its report on the incident, which saw the runaway iron ore hauler travel driverless at Autobahn speeds for more than 40 minutes.
BHP derailed the train 120km from Port Hedland, suffering no injuries or deaths but racking up a multi-million dollar repair bill for 245 fallen ore cars, 2 remote locomotives and 2km of rail.
The ATSB has finally delivered its findings into the incident, which seemed to grip the nation for one morning 3.5 years ago.
In short, it was BHP’s fault, not the driver of the out of control 42,500t 2.86km long train.
The ATSB found safety processes relied extensively on the driver’s memory, with limited processes in place to facilitate a cross-check of their key, safety critical actions.
“A train runaway can cause injury or loss of life, and while there were no injuries as a result of this accident, it did carry a significant financial and economic cost,” ATSB Chief Commissioner Angus Mitchell said.
“A certain set of specific circumstances meant not completing a single safety-critical action – placing the automatic brake handle in the pneumatic emergency position – had a significant consequence.
“This safety-critical action relied extensively on the driver’s memory, and the investigation found there were limited processes in place to facilitate or cross-check a driver completing key safety-critical actions.”
The investigation found that BHP did not clearly communicate the importance and reasons for this action to its drivers, reducing the potential for the drivers to correctly recall this action, and that the same mistake had been made on numerous prior occasions. It also looked into why prevention of the runaway train relied on a single action.
BHP has made a number of changes to safety procedures since the incident, updating the risk management framework associated with rail-mounted equipment interaction, updated the risk assessment, and added additional controls related to potential train runaway events.
BHP share price today:
BHP to make big splash to shareholders in September
BHP will at least have plenty of cash to deal with anything else it needs to do fix up in the future on the back of soaring commodity prices and its pending petroleum merger with Woodside (ASX:WPL).
Macquarie analysts think it could have US$32 billion to return to shareholders in September once the deal goes through, adding to profits from its soaring iron ore, copper and met coal businesses.
Macquarie, which has a $61 price target and buy rating on the big miner, says the value of the petroleum business has risen from US$20 billion to US$28 billion since the deal was announced last year amid rising oil and gas prices.
Materials gains a pale 0.24% as enthusiasm wanes in afternoon trade
Enthusiasm for the big miners waned in afternoon trade as materials slipped to a 0.24% gain.
That was better than the bulk of the ASX200, which found itself 0.22% in the hole on a quiet day for trading news.
South32 (ASX:S32) and Fortescue Metals Group (ASX:FMG) were the standouts amongst the mega miners.
Down in the murkier waters of the mid-cap miners and explorers lithium companies ruled the roost with Core Lithium (ASX:CXO) up also 10% on no news, Sayona Mining (ASX:SYA) up 6.06% and Liontown Resources (ASX:LTR) up 5.42%.
Liontown rose after announcing some decent drilling results from its Buldania project near Norseman. Buldania is a secondary asset for Liontown, which is planning to spend $473 million to build its Kathleen Valley mine in the northern Goldfields with Elon Musk’s Tesla on board as its cornerstone offtake partner.