SYDNEY – The world's biggest miner, BHP Billiton, said Wednesday it would cut about 6,000 jobs because of the global economic downturn and weakening demand for its products.

"These are very serious types of decisions and we don't take them lightly, but at the end they are necessary and they are the correct decisions," said chief financial officer Alex Vanselow.

The cuts represent about six percent of the Anglo-Australian miner's global workforce of 41,000 employees and 60,000 contractors.

They include 3,400 jobs in Australia mostly in coal and nickel production, 2,000 base metals jobs in Chile and 550 positions at the Pinto Valley copper mine in the US, Vanselow told reporters in a conference call.

BHP, which recently walked away from its hostile takeover bid for rival Rio Tinto citing the impact of the global financial crisis, said the cuts would mean a one-off cost of 500 million US dollars, without elaborating.

The group said it would indefinitely suspend operations at its Ravensthorpe nickel project in western Australia, citing "diminished prospects for profitability" as the outlook for nickel continued to deteriorate.

A total 2,100 jobs will be lost as a result of the shutdown and the scaling back of operations at the Mount Keith nickel mine, with another 200 going at the Olympic Dam copper-uranium expansion project.

Australian Treasurer Wayne Swan said the job losses were a "tragedy" and a reminder that the country, which has benefitted from years of strong demand for commodities from Asia, was not immune to the global economic slowdown.

"What we are seeing today 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," Swan said.

Releasing its half-year production results, BHP said the global economic environment deteriorated sharply in the last quarter of the 2008 calendar year, and it expected the market to remain "weak and uncertain."

Chief executive Marius Kloppers said, however, the miner was well positioned to weather the challenging conditions, and stood ready to make production adjustments if necessary.

"Given the very challenging environment the whole industry has faced over the past few months our production performance was particularly strong," Kloppers said in a statement to the Australian Stock Exchange.

"We have also been quick to take appropriate action to respond to market conditions, such as the previously announced production adjustments and project withdrawals, and we will continue to do so if required."

Aluminium and copper output were both weaker than a year ago, down eight and 11 percent respectively on the same period last year.

Falling copper prices were expected to erode earnings by 1.3 billion US dollars, BHP said, with an additional 300 million dollars lost due to price fluctuations and unplanned interruptions at its Escondida mine.

The miner also flagged a pre-tax first half impairment charge of 1.2 billion US dollars in writedowns related to its nickel slowdown, with a further 400 million dollars likely in the second half.

UBS analyst Glyn Lawcock said the job cuts mirrored recent moves by competitor Rio Tinto, which intends to cut 14,000 jobs worldwide this year in a bid to reduce debt.

"It is extremely tough out there -- the volume pushback (from customers) is large and you have to take the necessary actions," Lawcock said.

Australian-listed BHP shares were down 2.7 percent in early afternoon trade, selling for 28.17 (18.29 US dollars) in an overall falling market.