BHP Billiton Ltd. Pc announced that they would cut 6,000 jobs and close the giant Ravensthorpe nickel mine in Australia, writing off US$1.6 B, 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 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 last week that 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%.
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