BHP Billiton will cut 6,000 jobs and close its giant Ravensthorpe nickel mine in Australia, writing off $1.6 billion (Dh5.8bn), 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 downturn.
But as it became increasingly apparent there would be no quick fix to the slump in commodity prices, BHP was forced to do what it long resisted - close mines and cut jobs.
"Clearly the company's balance sheet is in a respectable position. But they are not immune from the commodity price environment that we are seeing, and earnings are going to suffer," said Neil Boyd-Clark, managing partner at Fortis Investment Partners.
BHP Chief Financial Officer Alex Vanselow yesterday warned more mines could be closed given the uncertainty in commodity markets, with the Australian metallurgical coal mines already slated to reduce output by 10 per cent to 15 per cent.
"The world changed a lot since October. It has been a very steep and dramatic change," he said.
BHP said it was cutting some 6,000 jobs in total, with around 70 per cent of those coming from independent contractors that work its mines.
"These are very serious types of decisions and we do not take them lightly, but at the end they are necessary and they are the correct decisions," said Vanselow. Rival Rio Tinto is already eliminating 14,000 workers, Brazil's Vale has cut 1,300 jobs and put 5,500 workers on paid leave.