BHP restarts smelter ops in Tasmania, cuts jobs

BHP has announced that it restarted its Tasmanian Electro Metallurgic Company (TEMCO) manganese smelter operations in Tasmania but will cut jobs at the site.

The miner initially suspended work at the facility in February "to review the economic viability of continuing operations".

BHP manganese Australia asset president Bryan Quinn explained the reasons for the initial shutdown.

"In February the decision was taken to suspend production at TEMCO due to operating losses," Quinn said.

This was not the first time BHP cut production at the smelter, shutting down its furnaces after the manganese markets slowed down in 2008.

Now that it has carried out its most recent review, BHP says "TEMCO operations will be restarted, with planning for a safe and full restart of the operation to commence immediately.

"The company's intention is to have all four furnaces operating by the end of August 2012."

However BHP went on to say that "a reduced organisational structure will be implemented for the restart," adding that this will "be achieved through natural attrition, an employment freeze and redeployment within BHP Billiton".

Quinn said due to extensive investigations over the last three months by TEMCO as well as the flexibility provided by stakeholders "significant cost reduction opportunities have been identified, primarily in the areas of workforce efficiency, power supply flexibility, ore blending, and freight optimisation.

"These changes should allow TEMCO to return to a globally competitive position."

Tom Schutte, head of BHP manganese added that "one of the key changes as we restart will be the operational separation of the TEMCO alloying facility from the GEMCO mine in the Northern Territory".

The miner's GEMCO operations have recently seen an increase in production, recording a manganese ore rise of 11% as it recovered from poor weather and it works towards the second expansion phase of the project.

"This separation introduces the ability to blend in other ore sources, which will improve operating performance while also allowing us to consider the strategic fit of the TEMCO operation inside BHP Billiton’s portfolio,” Schutte said.

TEMCO is a manganese joint venture between BHP and Anglo American, which produces around 65 000 tonnes of silico manganese and 240 00 tonnes of high carbon ferro manganese.

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