BHP Billiton Ltd. may take $1.7 billion in one-time charges after closing the Ravensthorpe nickel mine in Australia and slashing 6,000 jobs as the global recession curbs demand for minerals.
The company will book a $1.2 billion pretax charge for the six months ended Dec. 31 after shutting the mine and closing part of a refinery, the Melbourne-based company said today in a statement. It also expects to take a $500 million one-time, pretax charge in this half.
The future for metals demand, led by China, remains uncertain and BHP continues to review all its operations as metal prices, demand from factories and funding for projects collapse.
The Reuters/Jefferies CRB Index of 19 raw materials has plunged 54 percent from a record reached on July 3, the peak of a six-year mining boom, and has dropped 6 percent this year.
BHP will cut 1,800 jobs at the Ravensthorpe mine and its office in Western Australia and the Yabulu refinery in Queensland state, the company said in the statement. There will also be 300 job cuts at the Mt. Keith nickel mine in Western Australia where the rate of mining has been reduced.
The value of Ravensthorpe has now been written down to zero say the company, which in November took a $2.1 billion charge to write down the value of the Ravensthorpe and Yabulu operations. The price of nickel has declined 66 percent to $11,200 a metric ton from its high in March of $33,400 a ton.
Source: Bloomberg
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