BHP Billiton this morning revealed plans to sack 6000 employees and contractors around the globe - including 3400 in Australia - and close its disastrous Ravensthorpe nickel laterite project in Western Australia.
Ravensthorpe, which was officially opened by BHP's chairman, Don Argus, only last May, will be closed by June at the cost of 1800 jobs. Of those, 1450 are in WA and 350 are at the associated Yabulu nickel refinery in Queensland.
BHP Billiton shares tumbled in early trade, before closing 29 cents lower, or 1%, at $28.66.
The plans are likely to devastate regional communities like Hopetoun in WA, which had received an influx of new residents over the last few years due to the huge Ravensthorpe project.
BHP, the world's largest mining company, said its nickel division would sack another 300 workers at its Mt Keith nickel sulphide mine in a move to reduce mining costs at the large, low-grade open pit operation.
Queensland, SA cuts
During a media conference, BHP's chief financial officer, Alex Vanselow, said the company would cut another 1100 jobs at its coking coal operations in Queensland as part of a move to slash production by 10 per cent to 15 per cent this year due to reduced demand from steelmakers.
''These are very serious types of decisions,'' he said. ''We don't take them lightly.''
The miner will also eliminate 200 positions related to a planned expansion of its Olympic Dam project in South Australia, although the project itself might still proceed as forecast. Another 2550 workers in BHP's base metal division will lose their jobs in the US and Chile.
Writedowns
In addition to the job cuts, BHP revealed it would make more massive write-downs on Ravensthorpe and the associated Yabulu refinery.
BHP had already announced a $US2.1 billion pre-tax write-down on the $US2.8 billion project in November, but yesterday said it would add an additional $US1.6 billion in write downs and $US233 million in half-year losses to the figure, taking the total up to nearly $US4 billion.
The market is likely to view this as the most disastrous BHP project since its ill-fated hot briquetted iron plant near Port Hedland.
Unlike Rio Tinto, it was able to maintain iron ore production at fairly flat levels, but it was forced to sell much of its ore on the lower-priced spot market in order to maintain shipments.
It expects to produce 130 million tonnes of iron ore this year.
BHP said the global economic environment remained ''weak and uncertain''.
Its chief executive, Marius Kloppers, said the miner would continue to invest in growth projects, but would take a ''highly-disciplined and value-focused'' approach.
''We also remain alert to potential value accretive acquisition opportunities that may arise in the current market,'' he said.
SMH
