BHP cuts 70 jobs in WA despite rally in nickel price
The Age
Wednesday August 26, 2009
THE rebound in nickel prices has come too late to save the jobs of 70 workers at BHP Billiton's Mount Keith sulphide nickel mine near Wiluna in Western Australia.The job cuts represent about 8 per cent of the workforce €” 620 employees and 230 contractors €” with BHP saying the changes were needed to help ensure the operation's economic viability.The cuts are despite the nickel price rebounding 28 per cent in the past two months and more than doubling in the past six months from financial crisis-affected levels to a level well above the long-term averages that a mine such as Mount Keith would be used to.It is believed BHP undertook a review of the operation in the wake of last year's nickel price crash and found it could cut the 70 jobs without impacting either safety or production levels.At its peak, Mount Keith was capable of producing up to 45,000 tonnes of contained nickel.It is one of a number of operations acquired with BHP's takeover of WMC Resources in 2005. The future of the operation and the rest of the WA nickel business has come under sharp focus in response to nickel's retreat from the record levels of 2007-2008 and BHP's disastrous Ravensthorpe laterite nickel project investment, also in Western Australia.Speculation continues that without a major sulphide exploration success, or a sustained nickel price rally, the WA nickel division could well be better off sold. But BHP managing director Marius Kloppers recently talked down the potential for BHP to exit nickel.BHP has not been alone in reviewing its WA nickel operations. Minara delayed a $300 million expansion at its Murrin Murrin mine, Australia Mines suspended production at its Blair mine, and Russia's Norilsk suspended operations at Cawse, Waterloo and Silver Swan.
© 2009 The Age