BHP Billiton announced today its intention to temporarily suspend production at TEMCO, its manganese alloy production facility located in George Town, Tasmania, by early to mid March 2012.
TEMCO is part of the manganese joint venture between BHP Billiton (60%) and Anglo American (40%) and produces approximately 65kt of SiMn and 240kt of High Carbon Ferro Manganese. BHP Billiton is the Manager and Operator.
BHP Billiton Manganese President, Tom Schutte, said, “TEMCO is a processing business that competes globally with similar facilities in other parts of the world. Recently, there has been further erosion of its international competitiveness due to the strong Australian dollar and steady increases in input costs, including in reductants and electricity. At the same time, manganese alloy markets in Europe and North America have been weak and global prices remain low.
“While measures have been taken to make the operation as cost effective as possible, these have not been sufficient to counter shifts in the market, increased costs of production, or operating losses,” he said.
BHP Billiton Manganese Australia President, Bryan Quinn, said the Company will review the long term future of the operation over a three month period, which will include extensive stakeholder consultation and review of all options.
“Importantly, during this time there will be no change in the employment status of TEMCO based permanent employees. However, contracting partners will be reduced to those critical to essential activities. If any decision is made to reduce the number of permanent employees following the review, we will explore all options in order to preserve jobs, including redeployment opportunities within BHP Billiton,” he said.