By Robb M. Stewart
MELBOURNE--BHP Billiton Ltd. (BHP) is set to cut some jobs in
South Australia state following its decision to shelve a US$30
billion plan to build what would have been the world's largest
open-pit mine alongside its existing underground Olympic Dam copper
and uranium operation, state Premier Jay Weatherill said
Thursday.
Mr. Weatherill said he had been briefed by the mining company
regarding the extent of layoffs, but declined to say how many
people would be affected. He said BHP had indicated it would speak
to its workforce in the state soon.
"It is a matter for BHP to announce to its own workforce," Mr.
Weatherill said on the sidelines of a luncheon event in Adelaide, a
recording of which was released by his office. He added the roughly
3,500 jobs at the mine near the town of Roxby Downs would be
maintained.
BHP on Wednesday said its expansion plans for Olympic Dam had
been derailed by escalating construction costs, as well as weaker
commodity prices and the strength of the Australian dollar. The
company will instead investigate an alternative, less
capital-intensive design for an open-pit extension to the mine, but
added it wasn't likely to approve any new major projects until at
least mid-2013.
"We are not going into detail on specific adjustments, but
clearly there will be an impact on jobs in some areas," a
spokeswoman for BHP in Melbourne said.
BHP and other major mining companies have intensified their
focus on cutting costs as they have been squeezed by higher costs
and weaker prices in recent months. Chief Executive Marius Kloppers
told reporters Wednesday that the company had cut some jobs already
in its various operations, including hundreds of people in its
aluminum and nickel businesses over the last six months.
The coal industry in Australia's eastern states has been
particularly hard hit by a slump in prices as demand from China and
other countries has weakened. "There is broad industry movement
towards personnel reductions, contractor stand-downs and so on in
that coal industry," Mr. Kloppers said.
Write to Robb M. Stewart at robb.stewart@wsj.com
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