Finance Finance News Fortescue safety in question after string of incidents

Fortescue safety in question after string of incidents

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The safety record of iron ore miner, Fortescue Metals, is under further scrutiny after more accidents at its iron ore mines in north-west Western Australia.

The state’s mining regulator says it is investigating four incidents which happened this month at the company’s Solomon Hub iron ore mines in the Pilbara.

In late December, the WA Department of Mines and Petroleum (DMP) issued a rare directive to FMG to tighten safety procedures after a second fatality in less than six months at its Christmas Creek mine.

The incidents at the Solomon mines include a worker badly bruising a knee in a forklift accident, a breach of safety procedures when three drillers were 50 metres inside a 500 metre blast exclusion zone when an explosion went off, and two other incidents involving a water truck rolling over and a near miss with another water truck.

The Solomon mines are operated by construction giant, Leighton Holdings.

FMG does not have any supervisors on site but a small number of managers, but the company is understood to be satisfied with Leighton’s running of the mines.

Christmas Creek concerns

A far greater concern for Fortescue is the Christmas Creek mine, where two workers have been killed in accidents in the last six months.

The latest death was in late December, when 33-year-old contractor Allen Zuvela died while doing maintenance on heavy machinery.

That saw the DMP issue special directions to ensure that FMG improves safety at all its mines.

The department is investigating the company’s management systems, workshops and isolation and lock out processes.

Isolation and lock out procedures ensure that dangerous machinery is disconnected from a power supply when being cleaned or repaired.

The equipment is tagged and locked to make sure it is not turned on.

Fortescue says it is reviewing those procedures.

WA Department of Mines executive director of safety, Simon Ridge, said last month that a number of recent incidents at FMG mine sites appear to have involved “an ineffectual isolation and lock out/tag out process”, which may or may not be a contributing factor in Mr Zuvela’s death.

FMG dumped contractor, Crushing Services International, after the death of electrician Kurt Williams in August at an iron ore crushing plant at Christmas Creek.

The department says Mr Williams was caught and crushed by a tripper conveyor which was operating in automatic mode.

Earlier this week, FMG announced it had bought the CSI facilities and had employed 121 CSI workers.

It said the move would assist in “ensuring cultural alignment” among staff.

Use of contractors questioned

Fortescue’s safety record has improved, with fewer injuries this year compared to last, although its injury rates are higher than Rio Tinto and BHP Billiton.

However, unions have pointed the finger at FMG’s employment of contractors to run its mining operations.

Mick Buchan, the WA secretary of the Construction, Forestry, Mining and Energy Union, says the company could face mine closures under the departmental audit.

“We’re very concerned about the serious incident rate at FMG sites. It’s a disgrace and something has got to give, otherwise there will be more of the same,” he said.

Geologist Peta Libby is on the state’s Mining Industry Advisory Committee.

Ms Libby thinks proposed changes to the state’s mining laws will make miners and contractors take greater responsibility.

“I think it will be a bit clearer than, when there are contractors, both the principal and the contractor share ownership of safety,” Ms Libby said.

Investment advisor, Giuliano Sala Tenna, from Bell Potter Securities, says shareholders are more focused on FMG’s debt reduction plans than safety.

However, he says the recent accidents have raised concerns.

“I think certainly with the incidents at Solomon Hub now on top of what happened at Christmas Creek, some investors will ask more

questions of the company,” he added.

In a statement, Fortescue’s chief executive Nev Power said that FMG takes safety very seriously.

“I would like to make it absolutely clear that no one on a Fortescue site is ever expected to do anything which compromises safety,” he said.

The WA Department of Mines and Petroleum says it is investigating all reported incidents and enforcement action will be taken if any short comings are identified.