Gas blast threatens Australia mine operations

MELBOURNE (Reuters) - Australia's biggest mining state of Western Australia lost a third of its gas supplies on Wednesday, with the operator of a gas plant hit by an explosion declaring force majeure to its major customers.

About 30-40 percent of gas supplies, mostly to industrial users, were cut off after the explosion late on Tuesday at the Varanus Island gas processing plant operated by Apache Energy, a unit of U.S.-based oil and gas producer Apache (APA.N).

Western Australia is the world's biggest producer of iron ore and one of the biggest producers of gold and nickel.

Apache said gas supply would be affected for a number of days and added a small fire was still burning at the Varanus Island gas plant.

The fire was caused by a series of ruptured pipelines, Apache Energy managing director Tim Wall said.

BHP Billiton (BHP.AX)(BLT.L), the world's top miner, and Alumina (AWC.AX) said their Western Australian mines and plants were operating normally despite the cut to gas supplies.

"At this stage we're operating as normal. However, we'll continue to assess the situation as we get more information," a BHP Billiton spokeswoman said in an e-mail.

Alumina , which has three joint venture plants in Western Australia with Alcoa (AA.N), said the gas outage should not affect its output of 8 million tonnes a year.

"Production hasn't been cut back," spokesman Ken Dean said.