Mining giant BHP Billiton will cut some 37 staff from its Kambalda concentrator, in Western Australia, as third-party providers cut ore supply.
The concentrator, which has a capacity of 1.6-million tones a year, relies entirely on third-party feedstock.
Speaking at the Paydirt Nickel conference, Nickel West asset president Eduard Haegel said recent announcements by producers Panoramic Resources, Independence Group and Mincor would result in a significant reduction in the amount of ore being delivered to the Kambalda operation from November.
As a result, BHP had been forced to scale back operations at the concentrator.
While this is clearly a very difficult time for the workers at Kambalda, Nickel West will make every attempt to retain as many people as possible by offering redeployment opportunities to our other enterprises. This has been made possible because of an introduction of a hiring freeze earlier in the year and the effect of natural attrition, Haegel said.
With nickel prices in the doldrums, producers have been looking to cut costs.
ASX-listed Mincor in April launched a revised mining strategy designed to protect its operational capability and ore reserves through the price downturn, while optimizing short-term cash flows and preparing for a transitional period of suspended production., if necessary, during which the company’s resources would be focused on exploration and the development of its suite of growth projects.
As part of this strategy, it also stopped capital development at both its Mariners and Miitel mines, which feed the Kambalda concentrator, resulting in some 88 redundancies.
Production at both Miitel and Mariners was under threat, with Mincor saying on Thursday that the company would mothball the two operations if nickel prices did not improve within the next month.
Panoramic has, meanwhile, suspended production at the Deacon orebody within its Lanfrachi operations, which also feed the Kambalda concentrator.
In August, Panoramic took the decision to bring forward the suspension of operations at Deacon following a seismic event, resulting in nearly half the workforce at Lanfrachi being dismissed.
Diversified miner Independence Group has also revised the mine plan of its Long operation, which feeds Kambalda, cutting 28 staff members as some activities at the mine were discontinued in Septenber.
Future mining activities at Long would focus on longhole stoping, supported by twin-boom jumbo development. Other mining methods and activities, including mechanized cut-and-fill, air-leg and single-boom jumbo, would be discontinued.
Long’s expected nickel production would decline from the original 9000t to 10000t target, to between 8500t and 9000t.