A mining giant could pause production across an entire division.
BHP is deciding whether to place multiple operations into care and maintenance due to the recent drop in commodity prices.
“Operations at Nickel West are being optimised and options are being evaluated to mitigate the impacts of the current low realised prices. Nickel West has responded by reducing discretionary expenditure and reviewing capital plans,” the company said in its latest half-year update.
“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 … and reviewing our capital plans for Nickel West and West Musgrave,” BHP chief executive Mike Henry added.
The remarks came after nickel spot prices dropped nearly 42 per cent to US$16,460 (A$24,812) a tonne between January and December 2023 according to the YCharts website.
“Due to the deterioration in the short- and medium-term outlook for nickel, BHP has lowered its nickel price assumptions. In addition capital costs for Western Australia Nickel have increased due to inflation,” the update said.
The employer has already decided to suspend activities at its Kambalda concentrator and transition it to care and maintenance from June 2024. Up to 3000 existing workers could be impacted if Nickel West shuts down.
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