BHP shares fall as mining operations grind to a halt

BHP shares are falling again as another setback hits.

It hasn't been a great start to Thursday's session for BHP Group Ltd (ASX: BHP) shareholders.

The mining giant's share price has fallen 2.34% to $60.62 in morning trade, wiping out Wednesday's 1.39% gain.

The stock is now trading almost 12% below its August high of $68.77, with Thursday's decline adding to a fairly difficult September.

The selling follows an incident at one of BHP's major overseas operations, where activities have been suspended.

So, what just happened?

Two miners talking to each other.

Image source: Getty Images

Fatal accident forces mine shutdown

According to Reuters, a worker was killed on Wednesday while carrying out maintenance work at BHP's Escondida copper mine in Chile.

Escondida is the world's largest copper mine, located in Chile's Atacama Desert.

Union officials reported that the accident involved a front-end loader, a large vehicle used to move materials around mine sites.

Following the incident, BHP confirmed that all operational activities at Escondida had been suspended, although it hasn't said when production might resume.

Under Chilean mining regulations, operations cannot restart following a fatal accident until safety inspectors have confirmed that conditions are safe.

A major blow to BHP's copper business?

Escondida is one of BHP's biggest assets, with the mining giant holding a 57.5% stake in the operation.

To put its size into perspective, the mine produced approximately 1.26 million tonnes of copper during FY26.

Copper has also become a huge part of BHP's business, generating US$18.2 billion in underlying EBITDA, or 54% of the group's total earnings last financial year.

Looking ahead, BHP is targeting production of between 1 million and 1.1 million tonnes at Escondida in FY27.

However, those forecasts were issued before yesterday's incident, and the company has yet to indicate whether the shutdown will affect its production targets.

A strike could be next

The shutdown comes at a difficult time, with BHP also facing the possibility of a strike at Escondida.

The mine's supervisors' union, which represents around 1,020 workers, has urged members to reject the company's latest pay offer.

Union members are scheduled to vote between 28 and 30 September, with union leaders urging workers to support strike action.

If the offer is rejected, a mandatory five-day government mediation process would follow before a legal strike could begin.

What happens next for BHP shares?

At $60.62, BHP shares are looking considerably more attractive than they did above $68 last month.

However, I wouldn't be rushing to buy based on today's decline alone.

I'd prefer to wait for an update from BHP before deciding whether the recent pullback presents a buying opportunity.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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