FOLLOWING months of mounting speculation over the viability of its Ravensthorpe nickel mine, BHP Billiton has today confirmed market suspicions, announcing it will begin the progressive shutdown of the Western Australian operation and cut close to 2000 staff.
BHP said the decision to pull the pin on Ravensthorpe, which has been in production less than a year, was in line with the miner’s forecast for lower profits, especially given the current nickel market and high capital expenditure involved at Ravensthorpe.
The Metals & Mining sector added its weight to the FTSE 100 index on Wednesday after BHP Billiton announced it will take a $1.6 billion hit in 2009 after opting to close down its Ravensthorpe nickel mine in Australia in reaction to declining demand.
BHP, which last month withdrew its bid for peer Rio Tinto citing deterioration of near-term global economic conditions and lack of any certainty as to when conditions would improve, said it will indefinitely suspend operations at Ravensthorpe Nickel Operation in Australia, as a result of which its Yabulu operation will also stop the processing of the mixed nickel cobalt hydroxide product.
The company said this decision was largely the result of diminished profitability prospects in the current environment, significant and continuing deterioration in the outlook for the nickel market, and the projected level of capital expenditure required to achieve and sustain projected production volumes at Ravensthorpe.
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This Agreement shall be known as the Ravensthorpe Nickel Project and Thiess …… Where the Employer seeks to close down the site, or sections of the site, …