Jan. 21 (Bloomberg) -- BHP Billiton Ltd., the world’s largest mining company, may take $1.7 billion in one-time charges after closing a nickel mine in Australia and slashing 6,000 jobs as the global recession curbs demand for minerals.

The company will book a $1.2 billion pretax charge for the six months ended Dec. 31 after shutting the Ravensthorpe mine and closing part of a refinery, BHP said today in a statement. It’s also cutting coking coal output as much as 15 percent and expects a $500 million one-off cost this half, Chief Financial Officer Alex Vanselow said on a conference call.

The future for metals demand, led by China, remains uncertain and Melbourne-based BHP continues to review all operations, Vanselow said. The company joins Rio Tinto Group, Mitsui Mining & Smelting Co. and Anglo American Plc in reducing output and cutting workers as metal prices, demand from factories and funding for projects collapse.

“It’s a sign that we are in for a pretty sustained downturn,” said Ken West, a partner at Perennial Investment Partners Ltd. in Melbourne who helps manage the equivalent of $1.9 billion. “They are trying to realign their cost base.”

BHP rose 12 pence, or 1 percent, to 1,165 pence ($16) in London. Rio, the world’s third-biggest mining company, gained 2.4 percent. BHP closed down 1 percent at A$28.66 ($19) in Sydney.

The Reuters/Jefferies CRB Index of 19 raw materials has plunged 54 percent from a record reached July 3, the peak of a six-year mining boom. Rio said yesterday it would trim aluminum production at its Alcan unit by an additional 6 percent and eliminate about 1,100 jobs.

‘Really Unprecedented’

“What we are seeing today is really unprecedented in terms of the economic circumstances,” Vanselow said. “For the medium term, there will continue to be uncertainty and we need to be aligned with that.”

The International Monetary Fund forecasts that advanced economies will contract simultaneously this year for the first time since World War II. Alcoa Inc., the largest U.S. aluminum producer, last week reported its first quarterly net loss in six years because of “historic” price declines and said it would make further output cuts in 2009 if demand continued to weaken.

BHP’s decision “is a sober reminder of the unwinding of the mining boom caused by the global financial crisis, and in particular the slowing of the economy in China,” Australia’s Treasurer Wayne Swan said in Sydney.

China’s Economy

China’s economy may grow 8 percent this year, Vanselow said. The world’s third-largest economy may have expanded at the slowest pace in seven years in the fourth quarter, according to the median estimate of 12 economists surveyed by Bloomberg News. The data is due to be released this week.

BHP will cut 1,800 jobs at the Ravensthorpe mine and its office in Western Australia and the Yabulu refinery in Queensland state. There will also be 300 job cuts at the Mt. Keith nickel mine in Western Australia where the rate of mining has been reduced.

BHP’s global workforce totaled 101,000 people before the job cuts, comprising 41,000 employees and 60,000 contractors, Vanselow said. It will cut 550 jobs at Pinto Valley in the U.S., 200 at Olympic Dam in South Australia and 2,000 at its base metals unit in Chile.

Down to Zero

The value of Ravensthorpe has now been written down to zero, Vanselow said. BHP in November took a $2.1 billion charge to write down the value of the Ravensthorpe and Yabulu operations. The price of nickel has declined 66 percent to $11,200 a metric ton from its high in March of $33,400 a ton.

BHP is one of the last global mining companies to announce major layoffs and curb output. It earlier unveiled cuts to output at the Samarco iron-ore pellet project in Brazil, a joint venture with Cia. Vale do Rio Doce, and at the Samancor manganese operations in South Africa and Australia.

A total of 1,100 jobs will be eliminated from coking coal operations in Queensland, Vanselow said. Production of the fuel, used to make steel, increased 5 percent in the second quarter to 10.2 million tons, the company said in a separate statement. Still, it expects demand to weaken this half, resulting in a drop in full-year sales.

BHP’s iron-ore output for the three months ending Dec. 31 rose 5 percent from a year ago to 29.4 million tons. It wants to produce 130 million tons this financial year, up 17 percent on the previous year.

There won’t be any job or output cuts at the iron-ore unit, Vanselow said. Some long-term contract customers have asked to defer deliveries of iron ore and coking coal.

To contact the reporters on this story: Rebecca Keenan in Melbourne at rkeenan5@bloomberg.netJesse Riseborough in Melbourne at jriseborough@bloomberg.net;

Last Updated: January 21, 2009 12:12 EST