MELBOURNE (Dow Jones)--OZ Minerals Ltd. (OZL.AU) said Friday it will shut its Avebury nickel mine in Tasmania because it has become unprofitable due to the drop in nickel prices. "At these prices it is simply more economical to keep this metal in the ground and resume production when prices improve," Chief Executive Andrew Michelmore said in a statement. Michelmore said it was disappointing to be closing down a new mine that had only just begun production and that 189 jobs would be lost as a result, including 64 company employees and 125 contractors. OZ Minerals said the mine will be placed on care and maintenance until further notice and the company is discussing the impacts of the shut down with customer Jinchuan Group and expects life of mine supply agreements to continue when production resumes. OZ Minerals is struggling to refinance US$560 million of debt facilities by a Dec. 29 deadline and has said it is considering potential asset sales, equity raisings or a takeover of the company as possible solutions to its debt woes.
OZL Price at posting:
55.0¢ Sentiment: None Disclosure: Held
