BHP cuts another 140 jobs over abandoned Olympic Dam expansion plans

BHP cuts another 140 jobs over abandoned Olympic Dam expansion plans

Olympic Dam uranium mine (Image courtesy of BHP Billiton).

BHP Billiton (ASX, NYSE:BHP) (LON:BLT) will let go about 140 employees from its Adelaide offices in South Australia, and is warning about more cuts from its Olympic Dam copper, uranium and gold operations in the state.

The planned job cuts come only a few months after the company scrapped about 90 positions and around 130 contractor jobs at the Olympic Dam mine. They are part of an ongoing strategic review of BHP’s operations in light of a sustained global downturn in commodities, the miner said.

"At Olympic Dam, we continue to simplify our business to ensure we are operating as efficiently as possible," BHP said in a statement published by InDaily.

"This is consistent with the work being done in other BHP Billiton operations, and across the resources sector, and reflects the challenging external environment".

More to come

South Australian Treasurer, Tom Koutsantonis, said in a radio interview Thursday the redundancies were just the tip of the iceberg, anticipating more job losses to come to BHP’s Adelaide office.

“Let’s be clear about this,” he told ABC Radio. “This will get worse before it gets better in the resources sector.”

But Koutsantonis called locals to remain positive, despite the job cuts.

BHP cuts another 140 jobs over abandoned Olympic Dam expansion plans

BHP has been testing heap leaching, a complex chemical process used to extract copper, uranium and precious metals from ores.

"[The Olympic Dam] is the largest copper deposit found anywhere in the world in the last 25 years, it is the largest uranium deposit found anywhere in the world in the last 25 years, and the largest mining company in the world owns this deposit and is committed to its expansion," he said.

Since 2012, when BHP shelved a $33 billion expansion of the mine to focus on investment returns, the company has been working on cheaper ways of extracting resources from Olympic Dam. The miner seems to be leaning towards heap leaching, a technology that would be more cost effective than a broader expansion of the mine.

The cancelled plan was expected to create the world's largest uranium mine within 11 years. It included the construction of 270km of power lines, a 400 km pipeline, a new desalination plant and a 105km railway.

Before the cuts announced today, BHP’s Olympic Dam —Australia's largest underground mine— employed about 4,000 people, including full-time employees and contractors.