Miners in Western Australia were considering their options on Friday, after damage caused by an explosion that severed natural-gas supplies from an offshore plant appeared likely to take at least two months to repair.

On Tuesday, a pipeline ruptured at the Varanus Island plant, operated by Apache Energy, causing an explosion and cutting gas supplies from the plant, which supplies most of its production to industrial customers, including iron-ore and gold mines, and aluminium producers.

The fire had been extinguished, but, based on initial assessments, partial restoration of gas supply was likely to take “a couple of months” as the equipment needed would take some time to source, Apache Energy MD Tim Wall said.

“Some of the materials required to restore the facility are not off-the-shelf items,” Wall said in a statement on Friday.

Apache, which has declared force majeure on gas supplies, is responsible for about a third of Western Australia's gas supplies.

Companies with operations affected by the incident included the world's biggest miner, BHP Billiton, Rio Tinto, Newmont Mining, Minara Resources, Oxiana, Newcrest, Iluka Resources, Alumina and Alcoa.

The Premier of Western Australia, Alan Carpenter, would chair a meeting on Sunday with industry and “affected parties”, to coordinate responses to the situation, the state Office of Energy said.

Energy Minister Francis Logan visited the Varanus Island site on Friday.

Western Australia's mineral and petroleum industry was worth A$53,1-billion last year, according to the state's website.

Sales of iron-ore, the largest sector by value, reached a record A$16,1-billion in 2007, from 264-million tons.

RESPONSES

While some operations remained halted, or were winding down, on Friday, diversified miners Rio Tinto and BHP Billiton said that their iron-ore production had not been affected.

"Our iron-ore and nickel west businesses aren't impacted at this stage - we are working closely with our suppliers to ensure our operations receive adequate gas supplies," BHP Billiton spokesperson Samantha Evans told Mining Weekly Online.

Rio and BHP are the second and third largest producers respectively of the steelmaking ingredient, and most of their iron-ore output comes from Western Australia's minerals-rich Pilbara region.

However, BHP Billiton's Worsley Alumina was operating under reduced gas supplies.

"The main impact is in reduced output from the calcination process. The short term solution will be to store additional hydrate on site, ready to be calcined at a later date. The long-term impact on production is not known at this stage," Evans said.

"Production at Newmont’s Jundee Gold Mine and the KCGM joint venture is not expected to be impacted by the incident with both operations switching to diesel power," Newmont spokesperson Sharon Iannello said in an emailed response to questions.

"Newmont is also investigating alternative gas and energy sources," she added.

Other companies, including Australia's largest gold-miner, Newcrest, and aluminium producer Alcoa, had also switched to costly diesel to keep operations running.

Many companies were still waiting for more clarity on when gas supplies would start again before making firm arrangements, and Reuters reported that both BP and Shell were considering increasing or speeding up diesel imports to meet the increased demand for the fuel.

Base-metals producer Oxiana, which was using standby diesel-powered generators at its Golden Grove operation since the gas supplies were interrupted, said on Friday afternoon that it had begun sourcing electric power on the spot market, and had began restoring operations to full production.

However, Iluka Resources, the world's biggest producer of zircon, said that it had completed a controlled shut down of its Mid West and South West mineral sands operations in Western Australia, after energy retailer Alinta said that it would be unable to maintain power supplies to the operations.

The company was investigating options for alternative energy supplies and would carry out maintenance during the shut down period, Iluka said.