BHP closes mine following “significant seismic event”

Diversified miner BHP Billiton (ASX: BHP) was forced to suspend production at its underground Perseverance nickel mine located in Western Australia in late October, following a “significant seismic event.”

Following analysis by technical and operational teams as well as independent experts, the miner established that it would be unsafe to resume operations in the sub-level cave at the mine. As reported by The Australian Financial Review, approximately 200 jobs will be affected but many of those will be redeployed into other areas of the business, making it impossible to know just how many jobs will be lost.

Whilst production has been suspended, the processing facilities at the mine will continue to operate and the underground infrastructure will be maintained. Nickel production is not seen as one of the company’s core operations, and given that it does not form a part of CEO Andrew Mackenzie’s “four pillar” strategy, could be divested in the future as a way to cut costs.

The production impact will be reported in the miner’s December quarterly report, which will be released next month.

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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

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