Rising operation costs and a challenging global sector has forced Australian miner Metals X Limited to place its Nifty Copper Operations into care and maintenance, effectively immediately.

Key points: The operation in WA's East Pilbara employs 320 staff and approximately 110 contractors

The operation in WA's East Pilbara employs 320 staff and approximately 110 contractors Over the next two years, copper prices are forecast to remain depressed due to weak demand from China

Over the next two years, copper prices are forecast to remain depressed due to weak demand from China For the September quarter, it cost Metals X $14,659 per tonne of copper it mined — more than twice the market price

Located in Western Australia's East Pilbara, Nifty employs 320 staff and approximately 110 contractors.

Metals X managing director Damien Marantelli said very few of those positions would be saved.

"We will require a small workforce to ensure the mine and associated infrastructure is appropriately maintained so that it could quickly be returned to production," Mr Marantelli said.

"There will be approximately 290 staff losses."

The future of the 110 contractors is not known.

Grader operator Ray "Razor" Cotterill, 78, has worked at the mine for 16 years under various companies.

Mr Cotterill was among a few dozen newly unemployed workers flown back to Perth today.

He said staff were not told much before this morning but said the announcement was not a total surprise to him.

"We sort of expected it really, it's been sort of hanging around," he said.

"We were on night shift and when we knocked off this morning, they told us."

Grader operator Ray "Razor" Cotterill, 78, says he will likely retire now. ( ABC News: James Carmody )

Also working that shift was 32-year-old Mandurah man, Stuart Krusch.

He said spirits were low among the Nifty employees.

"We got out of the hole about six o'clock this morning and found out we didn't have a job," he said.

"[Morale] was pretty shit, it was pretty average for about a week."

But Mr Krusch said he was confident there would be jobs elsewhere for most of his colleagues.

"I've already had a few phone calls myself, so yeah, I'm not too worried, I'll have a bit of time off for Christmas with the kids," he said.

Mr Cotterill said it would likely spell the end of his career.

"I'm pretty old, so yeah, I'll probably retire," he said.

Mr Marantelli said the company was "very disappointed" by the outcome.

"We are providing support, including our best efforts to find alternative employment," he said.

Stuart Krusch says he found out he had lost his job when he finished his Monday night shift. ( ABC News: James Carmody )

Closure shocks analysts

The use of copper in electric vehicles is set to see demand and price for the metal increase within the next five years.

But over the next two years, prices are forecast to remain depressed due to weak demand from China, according to commodity analysts CRU.

Senior base metals analyst Paul Wiggers de Vries described today's announcement as "a bit of a shock", as the high-grade copper concentrate produced at the Nifty operation was in deficit, globally.

"Before Nifty announced its closure, it was producing a copper concentrate of about 26 per cent, which is in high demand at the moment," he said.

Since May 2019, Metals X had "invested significant resources" to improve efficiencies at the Nifty Copper mine as part of a three-year, $27 million 'reset plan'.

The plan had attempted to expand the resource and reserve base at the site, increasing productivity and reducing costs.

For the September quarter, it cost Metals X $14,659 per tonne of copper it mined, almost twice what the market was offering for it.

Rural news in your inbox? Subscribe for the national headlines of the day.

With the price of copper currently sitting at $US5,800 per tonne, and forecasts for 2021 only rising to $US5,900 per tonne, Mr Wigger de Vries said Nifty's high cost of operations were unviable.

"In the September quarter this year, mining costs increased 40 per cent or so at the operation," he said.

"It's hard to come to reason to spend $27 million in capital when the copper price is a little bit depressed and your mining costs are rising, and you're not hitting the benchmarks that you were expecting to hit."

Mr Wiggers de Vries said lower utilisation of equipment and rising fuel costs were expected to be among the causes of the Q3 cost increase.

Mr Marantelli said despite the investment, after less than one year the operation was "not where it was expected to be".

"The increased uncertainty in the plan leaves us with no viable alternative."

High production costs and weak demand is expected to be the reason for the closure. ( Supplied: Metals X )

Two mines closed in less than a month

The Nifty Copper mine closure comes just weeks after Mineral Resources (MinRes) announced it would mothball its Wodgina Lithium project, south of Port Hedland in the Pilbara.

Of the 272 staff employed at the Wodgina Lithium project, 184 will be redeployed to other MinRes operations, and 88 jobs will be lost.

MinRes managing director Chris Ellison said it was a tough decision to stop operations.

"We've never employed a whole bunch of people and said, 'Whoops, we've screwed up, we've got to put you out of work'," he said.

"This time, we did."

The Minister for Mines and Petroleum, Bill Johnston, said the Government would look to support those who lost jobs.

"It's disappointing to hear of the Nifty mine closure and clearly I want to see what we can do for the workforce," he said.

"As I understand it, the contract mining workforce will be absorbed into other operations, but clearly for the 200 direct employees then there's a question over their future and I'm sympathetic to that and the Government will certainly have a look to see what we can do to be of assistance."

Mr Johnston dismissed suggestions the closure was a sign of any wider problems in the industry.

"It might be that we can help, as we have in other places, to assist in transition," he said.

"There are trends in the industry that go in many directions for different commodities, and nickel is very strong at the moment, as is iron ore, but individual projects will come and go depending on their own economics."

Meanwhile, for Metals X to resume its Nifty Copper Operations, Mr Wiggers de Vries said the company would have to consider a complete mine redesign to reduce its operating costs.

"It's hard to say, when they've just committed to this restart plan and it's already failed not even six months later," he said.

In January 2018, Metals X shares were valued at $1.17 but a week ago they were just 14 cents.

They fell a further 13 per cent following today's announcement.