Poseidon Nickel has cut jobs as it halts plans to restart the Lake Johnston nickel operation.
Poseidon acquired the project from Russia’s Norilsk Nickel last year for $1million, and had been working to finalise capital costs for the restart of the operation.
However the company has announced the current nickel price will delay the site from opening.
Poseidon said it had been forced to reduce its site and office based workforce to basic care and maintenance levels to reduce ongoing costs whilst waiting for improvements in the nickel market.
Board members, the CEO and senior management are also facing a 20 per cent pay cut.
Poseidon CEO David Singleton said the company had moved to rapidly ready the site for full scale operations.
“One of the outcomes of this activity has been our ability to now create revenue for the business through the sale of concentrate to Tsingshan,” Singleton said.
“The restart activity was completed in the expectation of an improving nickel price environment in 2015 as predicted by most pundits. Unfortunately economic uncertainties, which continue to play out, have conspired to prevent the nickel price keeping pace with us.”
If the nickel price improves, Singleton says the operation would only take four months to restart.
Nickel was last trading at $US11,495 a tonne on the London Metals Exchange .