BHP reduces WA project workforce at by 25%: AFR
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The news: BHP has stood down around one quarter of contractors building its $1.7 billion West Musgrave nickel and copper project in Western Australia, according to sources cited by the Australian Financial Review.
The numbers: On Friday, Citi analysts upgraded BHP despite benchmark iron ore prices sliding to new lows. Citi upgraded BHP to 'buy' as normalised multiples were looking "cheap enough." However, its target price was kept unchanged at $46 given its recent share price decline. By close of trading, BHP shares were down 1.51% to $42.41.
The context: A BHP spokesperson told the AFR that some contractors on the project had been “demobilised” as the company assesses phasing and capital spend on the project. While the staff reductions bring its total workforce down to around 300 from 400, the spokesperson said the entire project has not been abandoned.
The Australian nickel industry has been suffering increasing pressure from Indonesian producers, with growing supply lowering prices of the metal by almost 50% during 2023.
During February, the mining giant reported an 86% hit to its first-half profit, after warning shareholders of major write-downs due to an impairment of the value of its WA nickel division, and the class action against BHP Brasil over the fatal Samarco dam disaster.
The sources: Australian Financial Review, Capital Brief
