Can't you hear, can't you hear the thunder? Right now, there are plenty of men at work down under who are currently idle, as fires burn at a major natural-gas-processing hub for Western Australia. Normally, such an event would have limited repercussions and attract far less attention, but in a world already weary from soaring commodity prices, this accident bears watching.
Explosions and fires erupted Tuesday at Apache's
Western Australia is home to some of the richest mineral reserves in the world, along with some of the largest mining operations. These mines depend on the natural gas that flows through Varanus Island. With the world's leading supply of iron ore, gold production of about 240 tons per year, and significant contributions of nickel and alumina, even relatively short-lived disruptions to mining operations could reverberate throughout the world's commodity markets.
So far, thanks to contingency planning and on-site diesel supplies, the larger miners have managed to keep operations at full capacity. Rio Tinto
Operations at Newmont Mining's Jundee mine and its Kalgoorlie joint venture with Barrick Gold
For shareholders of Apache or any of the mining names listed above, keep your Foolish fingers crossed that the facility will be repaired in just a few days. If the damage is more severe, the affected miners' stocks could offer attractive entry points, since substantial production disruptions would likely be absorbed by resulting increases in spot prices.