BHP has announced it will be suspending production at its Temco facility at Bell Bay.
In a release to the media a short time ago, BHP Billiton announced that it would temporarily suspend production at its manganese alloy production facility near George Town by early to mid March, and conduct a review of the facility's future.
All permanent staff at Temco will be retained through the suspension.
BHP Billiton manganese president Tom Schutte blamed the high Australian dollar, high electricity costs and a weak market in Europe and North America for manganese alloys for the decision.
Today's news is a further blow to the north, with the Beaconsfield gold mine set to close in June next year with a loss of about 150 jobs.
Following BHP's announcement this morning, State Economic Development Minister David O'Byrne said the government will lead a delegation to Canberra in coming weeks to "explore all options for supporting the Tasmanian manufacturing sector through difficult market conditions".
"... we understand this announcement will cause concern and uncertainty for workers. Our thoughts are with them, and the government stands ready to support them in any way it can," he said.
Mr O'Byrne said both he and Premier Lara Giddings will travel to Canberra to meet with the Prime Minister.
"We're determined to explore every single option to ease the pressure on our important manfacturing businesses - whether temporarily or in the longer term," he said.
The Age is reporting that contracting jobs appear certain to be lost in the short term, while results of the review will decide if the reductions will affect full-time workers.
“TEMCO is a processing business that competes globally with similar facilities in other parts of the world," Mr Shutte said in the statement.
"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."
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," Mr Quinn said,.
"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.
Shipping activities will continue during the suspension.
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