Tuesday 25th Feb, 2020

BHP’s Pilbara derailment cited in memo criticising staff performance

Photo: ATSB

The November 2018 derailment of a runaway BHP iron ore train has been used to justify cuts to employee incentive payments, a leaked memo has revealed.

A June 28 memo, leaked this week to the Financial Review, reportedly tells employees operating under the miner’s short-term incentives scheme that their reward for the FY19 had been slashed by 20 per cent.

Cuts were reportedly triggered by a number of major incidents: an acid plant outage at Olympic Dam; fires at Nickel West and Spence; and the November derailment of a fully-loaded iron ore train on BHP’s Pilbara railway in Western Australia. The death of a worker at BMA in December was also listed as a key issue.

“The negative impacts of these events, in combination with more specific operational challenges at some assets, meant we fell well short of production volume expectations across the company for FY2019,” the memo states, according to Financial Review.

“Against our scorecard measures, we did not deliver against many key milestones,” the memo states.

“We can only succeed when we trust each other and collaborate as a team of teams.”

BHP in January said the derailment had contributed to a US$600 million hit to its productivity in the first half of the financial year. Productivity in its iron ore business, specifically, took a 6 per cent hit due to the incident.

An Australian Transport Safety Bureau investigation found a team of workers sent to assist the driver of the train went to the wrong train prior to the runaway.

The fully loaded train, which had left its driver behind, was intentionally derailed at a set of points 120 kilometres south of Port Hedland, destroying two locomotives, 245 ore cars, and two kilometres of track infrastructure.

The derailment occurred after a 91-kilometre runaway, during which the train reached speeds as high as 162km/h.

The derailment shut BHP’s iron ore railway for five days.

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