News: BHP UPDATE 1-Australia's BHP confirms some contractors removed from West Musgrave project

(Adds context in paragraphs 2-3, BHP comment in paragraphs 4-5)

March 18 (Reuters) - BHP Group (BHP) confirmed on Monday that some contractors are being "demobilised" from the global miner's West Musgrave nickel and copper project in Western Australia, but said work on the mine is still ongoing.

BHP operates a nickel smelter and a refinery in Western Australia, employing 3,000 people, and had last month warned that the slump in nickel prices could slow development of its West Musgrave copper nickel project.

The company had flagged a $2.5 billion non-cash impairment charge in relation to its Western Australia nickel business.

"We continue to assess phasing and capital spend for the ongoing development of the West Musgrave project and have reduced the scope of work with some contractors, who have demobilised from site as a result," a BHP spokesperson told Reuters in an emailed response on Monday.

The miner's decision to do away with some contractors is in line with its plans to assess phasing and capital spend at the project, the BHP spokesperson added, confirming that "work is continuing but at a reduced level of activity."

The Australian Financial Review (AFR) reported on Sunday that BHP has stood down around a quarter of the workforce building at the West Musgrave project.