Australia’s
The annoucement follows a loss of US$1.5 billion (A$2.3 billion) for the year ended May 31.
The closure affects all the operations acquired in the major’s takeover of Magma Copper in 1995.
BHP intends to shut down the mine and smelter complex at San Manuel, Ariz., and the Robinson mine, near Ely, Nev., by the end of August.
San Manuel produced 104,800 tonnes of copper in concentrates in the past fiscal year, in addition to 18,300 tonnes of copper cathode from solvent extraction-electrowinning (SX-EW). The smelter complex produced 304,200 tonnes of refined copper.
At the Robinson mine, BHP produced 61,700 tonnes of copper in concentrates.
The company will continue leaching and SX-EW production at the Pinto Valley mine on an interim basis, while the refinery near White Pine, Mich., will not be affected.
Following the announcement, copper prices climbed more than 2 cents, to US69 cents per lb., on the Comex division of the New York Mercantile Exchange. Stockpiles at the London Metal Exchange had been in oversupply for more than a year.
The news boosted shares of BHP above US$22, while other copper miners benefited as well:
BHP acquired many of its American operations in its US$2.4-billion takeover of Magma Copper. However, an unexpected period of low copper prices forced the company to write down nearly US$1 billion in May 1998. The loss for the year amounted to US$973 million.
BHP’s 1999 net loss of US$1.77 billion is largely a reflection of writedowns and restructuring costs of US$2.19 billion. On a positive note, the company managed to offset some losses with US$427 million from the sale of certain assets during the year.
The writedown included a US$1.19-billion charge relating to the closure of the American operations.
Farther afield, BHP has shut down the Hartley platinum mine in Zimbabwe, resulting in a further writedown of US$225 million. In June, the company agreed to sell its controlling interest in the troubled operation to its minority partner, Zimbabwe Platinum Mines. Despite its best efforts, BHP could not overcome unstable ground conditions, loss of reserves and dilution.
BHP will also close the Beenup mineral sands operation in Western Australia, which has been plagued by high clay content. The Coloso copper leach plant in Chile was closed in June, and will now remain closed.
The company will also write down US$138 million in petroleum mineral rights in the United Kingdom.
In the end, the company will lay off 2,630 employees and close its North American headquarters in San Francisco, as well as several exploration offices and research centres. Support services will be relocated to BHP’s office in Houston, Tex. Meanwhile, exploration offices will remain open in Vancouver and in Santiago, Chile, and Melbourne, Australia.
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