BHP Billiton will close its underground Perseverance nickel mine in Western Australia because of safety concerns.
On Oct. 31, A 3.7 magnitude earthquake halted operations at the mine after nine workers were trapped. The workers were brought to the surface despite a power outage at the mine, however, since the earthquake, Nickel West technical and operational teams and independent experts have assessed data and risks on the underground operations and have deemed it is not safe to resume operations.
“Following this analysis BHP Billiton has decided it is unable to safely resume operations in the sub-level cave at Perseverance Mine,” BHP said in a statement.
The decision will cost 200 jobs at the Perseverance Mine near Leinster, leading the company to reduce its operational workforce.
BHP’s Nickel West business will continue to operate processing facilities.
Nickel West, which has a total workforce of around 500, recently announced a $US1.7 billion writedown on assets amid weak nickel prices.
Nickel West will resume mining at Rocky’s Reward open cut mine near Leinster to provide an alternative ore supply to its business.
The company is now assessing the impact on production, which will be reported in the December 2013 quarter operational review.
BHP said 200 positions associated with underground operations would be affected and the company would try to redeploy employees before announcing a total number of redundancies.
It will continue to maintain the underground infrastructure at Perseverance mine.
Where possible, the company would find redeployment opportunities within Nickel West and the BHP Billiton Group. BHP Billiton wrote down the value of Nickel West by $1.91 billion in August, for a $1.4 billion after-tax impairment.
In August BHP said it expected overcapacity in the nickel industries to persist.