Mining giant BHP Billiton is cutting more than 3,000 jobs in Australia and will close a major nickel mine, because of poor profitability prospects.
The engine room of Australia's economy is showing unmistakable signs of faltering, as corporate leaders and trade unions in the resources-rich west report a collapse in business and consumer confidence, amid the international slowdown.
Major mining projects in Western Australia have been shelved, with the loss of thousands of jobs, while other expansion projects have been put on hold, as the country's boom state feels the financial chill brought on by a fall in demand from key markets such as China.
BHP Billiton is shedding 3,400 jobs in Australia. Another 2,000 posts will go in Chile and 550 at the Pinto Valley copper mine in the United States.
The cuts represent six percent of BHP's international work force and highlight a dramatic decline in the fortunes of mining companies.
Amid the worldwide slump, Australia's once mighty mining sector faces what is likely to be more downward pressure on commodity prices and demand.
Western Australian trade union representative Simone McGurk says the speed of the slowdown has come as a shock.
"People have been surprised at how quickly the global situation has started to come home to us in WA. In Western Australia, we lead a very charmed existence," said McGurk. "It's not only our coastline and our weather, but we have enormous natural resources that we've been able to exploit. The challenge for our government is to make sure that the community can withstand these changes."
A recent survey has shown that business confidence in Western Australia is at a ten-year low.
But, despite the gloom, there is optimism.
James Pearson, the chief executive of the state's Chamber of Commerce and Industry, says the local economy is robust enough to eventually bounce back strongly...
"The evidence is that, even though China and India and other emerging economies in Asia are being hit by the global financial crisis, long-term demand will return and the prospects for this state, which is more exposed than any other in Australia to the international economy, are very good," said Pearson.
Although senior corporate figures have stated that WA's mining boom was enduring a "temporary set-back", some academics believe that, for now, the good times are over.
There are predictions that unemployment will rise steeply and along with the mining industry, the housing sector will also suffer.
Australian Prime Minister Kevin Rudd has warned that economic conditions will worsen this year.
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