After reducing its West Musgrave workforce by 25 per cent earlier this week, BHP has decreased the number of contractors working at its Kalgoorlie nickel smelter.
BHP made the decision to cut costs amid the nickel downturn, which was primarily caused by a supply surplus and an increase in nickel supplies from countries like Indonesia and China.
BHP has paused work on a new precipitation system for the Kalgoorlie smelter, with the contractors installing the infrastructure being immediately stood down.
The major miner’s plans to build a short-term 1000-bed camp at the site have also been postponed. The housing was intended to accommodate workers needed to rebuild the 51-year-old smelter in 2025–2026.
According to The Australian Financial Review, BHP said in its application that up to 2000 workers would be needed at the peak of the smelter’s rebuild.
While work on the precipitation system and bed camp has been paused, the Kalgoorlie smelter has continued operating and BHP is currently weighing up the future of its nickel business.
The company is looking at deactivating its nickel business altogether until nickel prices improve.
BHP’s nickel woes started when it announced plans to pause part of its Kambalda processing operations in WA. The decision was made in light of Wyloo placing the Cassini, Long and Durkin nickel mines under care and maintenance.
Wyloo was a major supplier to BHP’s nickel concentrator in Kambalda, following its $760 million acquisition of Mincor Resources last year.
The pause at Kambalda led to BHP declaring an impairment against its nickel operations in its half-year results.
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