Australian mining major BHP said on Monday it has cut contractor jobs at its West Musgrave nickel and copper project in Western Australia as the miner, like many others, reels from the impacts of a global nickel price crisis.
The company said it had cut approximately a quarter of the contractor staff – around 100 people – at the site.
“We continue to assess phasing and capital spend for the ongoing development of the West Musgrave project and have reduced the scope of work with some contractors,” a BHP spokesperson told Reuters.
The move comes after the miner said last month it will close its Nickel West operations in Australia, citing “challenges” in the industry and a “deterioration” in the short and medium-term outlook for the metal. The company also said it will review business plans at its West Musgrave project.
BHP CEO Mike Henry said at the time: “This is an uncertain time for the Western Australia nickel industry and we are taking action to address the current market conditions… We are reducing operating costs at Western Australia Nickel and reviewing our capital plans for Nickel West and West Musgrave.”
Two weeks later, BHP announced it plans to trim headcounts in its Australian operations but did not disclose a figure for job cuts, although reports suggest losses could be in the thousands.
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By GlobalData
BHP’s outgoing CFO David Lamont said on a call to shareholders on Monday that the decision to review the division was necessary given operational losses due to the price slump. “To put that into context, 30% of the Australian nickel market has gone offline and another 30% is under pressure,” Lamont said.
A surplus in global supply of the metal, driven largely by a ramp-up in output of cheap, lower-grade ore from Indonesia, has been pushing prices down for some months. In mid-February, China and Indonesia, which together produce around 70% of the world’s nickel, announced further cuts to production in a bid to boost prices – but this has had little impact on the situation so far.
Several other miners including Glencore and First Quantum have also closed or significantly reduced nickel operations in Australia and elsewhere as profits nosedive.
