BHP to cut 6 000 jobs

SYDNEY – BHP Billiton Ltd/Plc will cut 6 000 jobs and close its giant Ravensthorpe nickel mine in Australia, writing off US$1,6 billion, as the global resources giant battles a collapse in commodity prices.

ustralia, writing off US$1,6 billion, as the global resources giant battles a collapse in commodity prices.
Until now BHP, the world’s largest miner, had set itself apart by maintaining production and just last month said sales volumes were holding up despite a global downturn.
But as it became increasingly apparent there would be no quick fix to the slump in commodity prices, BHP was forced to do what it long resisted – close mines and cut jobs.
‘Clearly their balance sheet is in a respectable position. But they are not immune from the commodity price environment that we’re seeing, and earnings are going to suffer,’ said Neil Boyd-Clark, managing partner at Fortis Investment Partners.
BHP Chief Financial Officer Alex Vanselow warned yesterday more mines could be closed given the uncertainty in commodity markets, with the Australian metallurgical coal mines already slated to reduce output by 10-15 per cent.
‘The world changed a lot since October. It’s been a very steep and dramatic change …’ Vanselow said.
BHP said it was cutting some 6 000 jobs in total, with around 70 per cent of those coming from independent contractors that work its mines.
‘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,’ Vanselow told a news conference.
Rival Rio Tinto is already eliminating 14 000 workers, Brazil’s Vale has cut 1 300 jobs and put 5 500 workers on paid leave and other miners have also warned jobs were at risk.
Fund managers said brokers were likely to cut their earnings forecasts for BHP, which had been expected to report a net profit around US$14 billion for the year to end-June.
‘Clearly the pressure on forecasts is on the downside as the market comes to grips with commodity prices that are lower than were expected as recently as a couple of months ago,’ said Boyd-Clark.
BHP’s Australian shares dipped one percent to A$28,66, while Rio Tinto lost two per cent after announcing further aluminium production cuts on Tuesday. – Nampa-Reuters