BHP to layoff 6000 employees globally, close operations in troubled Australian mine
Yet another biggie bogged down by the ongoing recession worldwide - this time, it’s the biggest mining group in the world - BHP Billiton!
Hit by the economic downturn, BHP has announced its decision to layoff 6 percent of its global workforce – or 6,000 employees and contactors. In addition, it will abandon its operations at its giant nickel mine, Ravensthorpe, with a $1.6 billion writedown; and slash production at its Mount Keith nickel mine.
The decision with regard to these mines, both in Western Australia, comes as an attempt to downsize its operations in the face of sinking metal prices. The upshot of the moves will be a US$1.2bn impairment charge, over and above the US$2.1bn provisions announced at the annual meeting last year.
The Anglo-Australian group’s Chief Financial Officer, Alex Vanselow, cautioned on Wednesday that operations in some other mines could also be shelved, due to the uncertainty in product markets; and 10-15 % output would be reduced in the Australian metallurgical coal mines.
At a news conference, Vanselow said: “These are very serious types of decisions and we don’t take them lightly, but at the end they are necessary and they are the correct decisions.”
Nonetheless, Vanselow also added that BHP was increasing production in a few areas of its iron ore and petroleum business, and pointed out that its iron ore target of 130m tonnes remains unchanged. (Additional reporting by Rupinder Kaur)
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