Poseidon Nickel to cut jobs: report

Forrest's attempt to revive Windarra project crippled by weakening nickel price.

More than 40 contractor layoffs represent an ominous sign for Poseidon Nickel Ltd chairman Andrew Forrest's efforts to revive the Windarra project amid weakening nickel prices, according to The Australian.

Poseidon has suspended drilling at the Windarra site this week in the wake of a failed bid by Mr Forrest, who owns a 32% stake in Poseidon, and chief executive David Singleton to secure about $200 million in debt financing in New York last month.

The newspaper reported that about 45 contractors were let go on Tuesday as Poseidon seeks to preserve cash, though workers were reportedly told the shutdown was related to technical problems involving dewatering at the site (see Brendon Lau's Mining for a ROE revival).

Mr Singleton denied the shutdown was related to cash flow issues.

“We've told them (contractors) that our expectation is we'll restart in the next couple of months or so,” he said, according to The Australian.

“We've got to the end of the original campaign, we're going into a bit of a pause and then we're going to restart again.”