Alcoa saw its shares fall 6.3 per cent yesterday after the US metals group said it would be unable to fulfil its alumina supply contracts and downgraded its second-quarter earnings estimates. This is one of the far-reaching consequences of last week's explosion at a key gas processing plant in Western Australia. Several other mining companies in the state, one of the world's most important minerals-producing regions, are also cutting targets for this year following the accident, which has reduced local gas supplies by 30 per cent. "We view the gas situation in [Western Australia] with some concern," said Marius Kloppers, chief executive of BHP Billiton, the world's biggest mining group. Alcoa, the world's largest producer of alumina, said it did not yet know the impact on its customers but that it expected the disruption to reduce its expected earnings per share of about 72 cents by 2-3 cents. The US group is one of the first to quantify the financial impact of the accident at the gas processing plant and pipeline on Varanus Island. It is already clear losses will be substantial. Apache, the US energy group that operates the facility some 100km offshore, has said it will be about two months before normal services resume. Woodside, operator of the North West shelf, Western Austalia's only other significant source of gas, will only be able to make up a small proportion of Apache's shortfall. "The [accident] has provided an additional headwind for earnings that were already struggling in the face of the [strength of the] Australian dollar, record oil prices, wet weather and infrastructure-constrained coal production and largely flat metal prices," said Citigroup in Sydney. Newcrest, the gold producer, and Minara, Australia's second largest nickel miner, are among the other groups that have cut output targets. Minara expects full-year production from its Murrin Murrin nickel mine in the state to be up to 7,000 tonnes lower than its 38,000 tonne forecast. Newcrest expects to lose 30,000 ounces of gold production at its Telfer operation. Goldman Sachs JBWere estimates each five-day loss of output at Telfer will cut Newcrest's earnings by $7m, assuming no recoveries from insurance. The disruption will also complicate the planned A$2.5bn ($2.37bn) flotation of Burrup Holdings. The ammonia producer is one of the biggest users of Varanus Island gas and has been forced to cease operations for the moment. Copyright The Financial Times Limited 2008