BHP suspends Australia iron ore mining after death

By James Regan

SYDNEY (Reuters) - BHP Billiton suspended all its iron ore mining in Australia on Friday, shutting in a third of the country's production after the second mine worker death in the past 10 days, raising broader safety concerns in its mines.

A BHP (BHP.AX)(BLT.L) spokeswoman could not say when the mines might re-open. In the case of past fatalities that have resulted in the closure of individual mines, including one less than two weeks ago, operations have resumed within a day or two following police and special emergency mine investigations.

But analysts worried that the prolonged loss of BHP's output -- 91 million tonnes a year of ore last year, roughly 10 percent of the globally traded market -- could tighten spot markets, especially after an unrelated force majeure by rival Rio Tinto.

"If it's a day or two, that won't cause much of a ripple, but if the mines remained closed for longer periods, say a week or more, then that could cause some issues," DJ Carmichael & Co analyst James Wilson said.

BHP ordered the giant open pit lodes across the iron-red moonscape of north west Australia closed immediately, fearing its employees would be distracted, a spokeswoman said.

The fatality, which occurred on Thursday at BHP's Yandi mine, 500 kilometres (310 miles) east of the western coast in the Pilbara district, follows the death of another worker at the mine on August 26.

"We're concerned that incidents such as this may distract employees' attention away from the task, which could put them at risk. So by suspending operations, we can reduce the risks associated with that," the spokeswoman said.

BHP employs around 8,000 people across the Pilbara, roughly 18 percent of the outback region's total population. It is the world's third-largest supplier of iron ore after Brazil's Vale (VALE5.SA) and Rio Tinto (RIO.AX)(RIO.L).