Thread: Ravensthorpe Nickel To Close?

Originally Posted by dm_td5

...........At least I now know where Williams is and realised I did drive through it back in 2003

you must have blinked - I did and missed it last April.......

Attached is a cut & paste from todays "Age" . I've attached it for those who, like me, are not familiar with the mine. It fills a lot of gaps in for all the posts to date.

Open mouths, closed mine

• David Lague
• January 31, 2009

WHEN investment from mining giant BHP Billiton began transforming the remote holiday and retirement village of Hopetoun, about 600 kilometres south-east of Perth, Leanne Martin saw her chance.
The Kalgoorlie-born Martin had always dreamed of opening a business, and the time seemed right as the original population of fewer than 400 began to swell with new arrivals.
In early 2007, Martin, 47, set up a deli and bakery on the main street that runs down to a sweeping bay on Western Australia's south coast. And the Big Australian was big-hearted as it encouraged the growth of local services to cater for the 1800 workers it had recruited for its new nickel mine outside the nearby town of Ravensthorpe.
As part of its assistance to an estimated 80 local businesses, the company paid Martin's rent for almost two years while she spent $175,000 of her own money to fit out the Shipwrecked Gourmet Delicatessen and build a thriving trade.
Then, without warning, BHP Billiton last week closed the mine it had projected would operate for up to 30 years, barely eight months after its official opening.
"They gave it to us on a platter and then they just took it away," Martin says with a wry laugh. "Now they are sending people around asking if we want counselling."
While many in Hopetoun remained stunned, BHP Billiton's decision is further evidence that the collapse in commodity prices will be painful for Australian miners and the communities they support. From a peak of more than $US51,000 a tonne in May 2007, nickel prices have dropped to about $US11,000 ($A17,000) a tonne on the London Metal Exchange.
On top of writing off its $US3.7 billion investment at Ravensthorpe, the closure has also been a public relations disaster for the world's biggest miner.
Where there had been a spirit of goodwill and co-operation between the company and the local community, which had trebled in size with the boom, there is now growing anger and disappointment at how the closure was handled. Having been encouraged to invest, borrow and take out long-term leases, some local businesses and contractors fear financial ruin.
"The conduct of the company after the announcement has been abysmal," says Rick Besso, president of the Ravensthorpe Regional Chamber of Commerce. "They have displayed arrogance and contempt in leaving this community without any consideration for the people they have hurt."
The company is also facing what could be a damaging court battle after the controversial sacking of its popular Ravensthorpe manager, Isak Buitendag, just two days after closing the mine. Buitendag says he will sue for wrongful dismissal after BHP Billiton told him he had been fired for conflict of interest and failure to follow internal procedures.
"I still don't have a proper explanation for my dismissal," he says.
Despite his dispute with the management, he says he did not oppose the company's decision to close the mine but he felt "desperately sorry" for the people involved.
In an interview in her delicatessen, Martin says she has yet to feel the full impact of the mine closure. She says the company has promised to make the final two rental payments it had earlier undertaken to pay.
In the meantime, it was business as usual while most of the mine's workers and contractors remained in town. She expected the real threat to her survival would come in June when the shutdown was complete and she would depend on the remaining locals.
Apart from its economic impact, Martin says the mine closure will rob Hopetoun of new residents who have enthusiastically embraced the town's coastal lifestyle and invigorated sporting teams and community organisations.
"These new people have brought new life," she says. "It is really quite sad."
Diagonally across the street in the Toun Beach Cafe, owner Jamie Steele, 35, says the shutdown could halve the turnover of the business he and his partner opened in August. As he watched the media coverage after the announcement, he knew immediately it was going to hurt.
"I saw a guy who used to come in for fish and chips every Wednesday," he says. "Then I recognised another regular. My business was literally flying out the door."
Steele says if the town's new businesses are to survive, they will need to attract more visitors to one of Australia's most spectacular coastlines.
Besso and other local business people say they understand that mining companies face tough times as commodity prices plunge amid a sharp global economic downturn.
But they can't fathom why BHP Billiton managers announced the shutdown and mothballing of the mine without a plan to soften the blow for businesses that believed the company had done its homework.
Local business people note the company is hardly cash-strapped despite the downturn. Some mining analysts forecast it will report a profit of about $US12 billion for this financial year.
"What I believe is required is an immediate relief plan to assist those people who have taken out mortgages, small business loans and leases," Besso says.
A building contractor, Besso says he had also invested in Hopetoun and stood to lose heavily, but he declined to give details: "I don't want this to be about me."
In announcing a $5 million assistance package for the region on Wednesday, West Australian Premier Colin Barnett said the company had a "moral obligation" to those it encouraged to move into the Ravensthorpe district, buy property and invest.
Barnett has been careful to avoid criticising the company but the closure has been a setback for the State Government after it spent an estimated $40 million on improving services for Hopetoun, including roads, a new school and buildings for emergency services.
In the aftermath of the closure at Ravensthorpe — part of wider cuts to BHP Billiton's operations in Australia involving the loss of 3400 jobs — the company has been in negotiations with its employees and contractors about redeployment to other mines, and what some workers have described as relatively generous redundancy and relocation payments.
There are now signs BHP Billiton accepts it has a responsibility to the community it is leaving behind, after more than a week of protests, threats of legal action and pressure from state and local governments. After talks with BHP Billiton's management on Wednesday, West Australian Mines Minister Norman Moore said the company had indicated it was prepared to consider financial assistance for local businesses.
A spokeswoman for BHP Billiton, Samantha Evans, said on Thursday that the company had opened talks with individual businesses in the area but she was unable to discuss details of negotiations. "We are obviously looking at ways to provide as much support as we can," she said.
In a statement on Thursday, the company confirmed it would buy homes in Hopetoun, Ravensthorpe and Esperance from employees who had been offered company assistance to buy homes there.
Besso remains confident the district will adjust to life without BHP, but he fears the closure will damage the prospects of residential-based mining operations in Western Australia.
As former president of the Ravensthorpe Shire Council when the mine was evaluated, he feels personal responsibility for the role he played in persuading BHP Billiton to embrace the local community.
"This was a bold experiment to look at an alternative way to run a mine," he says.
Rather than recruit a fly-in, fly-out workforce or build a new town exclusively for the mine, the company had decided to develop a partnership with an existing community. At a time of acute labour shortages in the mining industry, the aim had been to provide an attractive location and high-standard amenities that would allow the company to retain workers.
For a period, there seemed to be no limit to the resources and effort the company was prepared to put into housing, local clubs and community facilities.
Buitendag says the company spent "tens of millions" on social infrastructure and was planning to outlay up to $18 million on an indoor sports complex, ahead of the decision to close the mine.
Martin recalls BHP Billiton's community liaison staff welcoming her decision to open a business. "They used to bring prospective arrivals in here and show them around," she says. "It was the big sell."
Some industry experts suggest it was ongoing technical problems in refining ore at Ravensthorpe, rather than the crash in nickel prices alone, that sank the project. They note the price of nickel when the plant was under evaluation earlier this decade was still lower than today's figure.
Buitendag says that with falling prices, the economics of mining an ore body of variable grades was incredibly complex. "The question is: how did the company get it so wrong — and is there a way to make sure it doesn't happen again?" he says.
For Leanne Martin, there is no question of giving up. She is prepared to cut costs and run her deli single-handedly, and hopes her landlord will renegotiate her lease if times become difficult.
Like Jamie Steele, she is hopeful the town can build on existing holiday trade.
"I'm staying," she says. "I did not set up here to go broke."
David Lague is a Perth journalist.