MELBOURNE, Australia—BHP Billiton Ltd. will cut jobs and slow nickel mining at its Western Australia operations to tackle depressed prices for the metal and an earnings drag from the strong Australian dollar.
About 155 workers and contractors may be laid off, though BHP will seek to place people at its other businesses, company spokeswoman Kelly Quirke said. The cuts will primarily be in Perth, she added.
The mining giant said it remains committed to nickel and will continue to produce it at its Nickel West operation.
The unit will temporarily reduce mining at its Mt. Keith operation in the Northern Goldfields region, Ms. Quirke said, adding that a recent redesign enabling talc-bearing ore processing will allow Nickel West to maintain production of concentrate from stockpiled ore in the short term.
BHP flagged weaknesses at Nickel West last month with the release a quarterly production report that said the unit's operating margins remained sensitive to persistent weakness in nickel prices and the strength of the local currency.
At that time, it warned its aluminum business faced cost pressures and weaker prices, though production of iron ore and petroleum—key earnings drivers—were growing strongly.
Analysts have recently trimmed earnings forecasts for miners to reflect weaker commodities' prices and concerns that demand will remain weak in Europe and may falter in China, where economic growth is cooling.
BHP is unlikely to repeat the record profit it posted in the past financial year. The consensus forecast of almost 25 analysts pointed to an attributable profit of $10 billion for the financial first-half through December compared with $10.52 billion in the same period a year earlier. However, revenue is expected to rise to $37.41 billion from $34.17 billion.
BHP's Nickel West operations include the Mt. Keith open-cut mine and concentrator, the Leinster underground mines and concentrator, as well as the Kalgoorlie smelter. Its Cerro Matosa operation is one of the world's largest producers of ferronickel.
The company produced 38,400 metric tons of nickel in the December quarter, including 30,600 tons at Nickel West.
Nickel is used in alloys as well as in products such as mobile phones, rechargeable batteries, compact discs and computers. It adds strength and corrosion resistance to stainless steel.
