A mid-air engine blast on a Qantas A380 superjumbo that sent shards of metal raining down on an Indonesian island was triggered by a defective pipe, according to an update on the investigation.

On November 4, 2010, flight QF32 out of Singapore experienced an engine failure en route to Sydney, with the explosion punching a hole in the wing of the aircraft and showering debris on Batam island.

No-one was injured, but an emergency landing in a trail of smoke dented Qantas's reputation for safety and prompted the carrier to ground all its Airbus A380s.

In an interim report, the Australian Transport Safety Bureau (ATSB) said a "sequence of events" led to the engine failure.

It started with an oil fire caused by a manufacturing defect in an oil feed pipe.

"That defect resulted in fatigue cracking in the pipe, so that oil sprayed into an engine cavity where it ignited because of the high air temperature," the safety watchdog said.

The oil fire then weakened a turbine disc in the aircraft's second engine.

"As a result, the disc separated from its shaft, increased its rotation speed and broke into several parts," the investigation found.

Sections of the fractured disc and other engine components went on to penetrate the aircraft's left wing, along with other areas of the plane, causing major structural damage.

The plane's engine manufacturer Rolls-Royce said it was working closely with the ATSB to ensure all issues were effectively addressed.

"Each time an incident happens the aviation industry learns lessons," Rolls-Royce said in a statement.

"These are embedded in the rigorous safety procedures and standards of regulation which make flying an extraordinarily safe form of transport."

ATSB's final report is due to be released next year.

Qantas reached a settlement worth AU$95 million (US$104 million at the time) with Rolls-Royce in June 2011 over the incident. The aircraft involved in the scare remains grounded in Singapore.