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 Ravensthorpe closure, or “indefinite suspension” as the miner termed it, will put 800 BHP employees and 1000 contractors out of work by June.The much touted nickel laterite operation in WA’s South West region was widely criticised for cost blowouts and operational delays. Project costs blew out from an original $US1.04 billion to a whopping $US2.2 billion while, once in production, the plunging nickel prices and a hefty impairment charge raised further questions marks over the mine’s viability.Despite the many setbacks, BHP insisted all was well at the operation. Just last Thursday a BHP spokesman told CIN’S sister publication MiningNews.net the miner had no plans to lay off Ravensthorpe staff.The mine’s shutdown will also impact other BHP operations with the company announcing processing work will be scaled back at its Yabulu refinery north of Townsville, where Ravensthorpe product is processed.BHP plans to complete a “future options study” of the Queensland operation.Meanwhile more job cuts and operational changes were announced for the miner’s Mount Keith nickel operation in Western Australia.Around 100 BHP employees and 200 contractors at Mount Keith will lose their jobs by the end of next month after the miner announced the operation’s mining rate would be reduced “in order to preserve its economic viability”.The changes are not expected to alter the rate of concentrate production.The developments at Ravensthorpe and Yabulu will see BHP slapped with a pre-tax impairment change of around $US1.2 billion ($A1.8 billion) for the second half of last year, while an additional $US400 million charge is expected for the first half of this year.The grim news from BHP’s nickel operations coincides with the release of poor production data in the company’s December quarter report.Hartleys resources analyst Andrew Muir said both the Ravensthorpe closure and BHP’s production figures delivered “no huge surprises”.“I think most people expected Ravensthorpe to be close down,” he told MNn.Shares in BHP dropped 3.8% in intra-morning trading to $27.85, before inching up to $28.12 by 11am EDT.
