The remote town of Leinster in Western Australia's northern Goldfields runs almost exclusively on nickel.

For almost 50 years the town, about 370 kilometres north of Kalgoorlie, has existed to house the employees and contractors for the local mine.

So news BHP will be placing its Nickel West operation into care and maintenance has left almost every resident reeling.

Among them is Shire of Leonora president and BHP contractor Peter Craig, who has called Leinster home for the past 30 years.

He said the announcement 1,600 employees would be affected had left the community feeling "numb", with many contractors also bracing for impact in Leinster and across the Goldfields.

"At the end of the day, I really think the impact's probably not going to be felt until a few weeks or a month down the track," he said.

"There's probably thousands of jobs that are questionable, if they're still going to be there or not.

"The impact for the Goldfields is pretty significant."

With the town's future now uncertain, Mr Craig said the community would band together to the best of its ability.

"But we're actually talking about towns and people and community," he said.

"That's where the major impact is going to come — on those people."

'Shocked and disappointed'

About 270km north of Leinster, on the edge of the Western Desert, the small town of Wiluna is also questioning its future.

BHP's Mount Keith mine is about 85km to the north.

Shire president Peter Grundy described BHP's announcement as "devastating news" for the remote region's economy.

"There is a knock-on effect with a decision like this," he said.

Despite the announcement, he implored BHP to continue engaging with, and investing in, the shire's economy.

"BHP has profited immensely from the nickel our region is abundant in, and it now must do the right thing," Mr Grundy said.

"While this decision has been coming … we are still shocked and disappointed by it."

BHP said it would review the decision in 2027.

'Faint hope' remains

Mining analyst Peter Strachan believed there was hope, albeit a "faint hope", BHP would opt to restart operations at that time.

"I think they're looking out to the future where more and more nickel is going to be used in lithium-ion batteries," he said.

"I wouldn't be calling the death knell at the moment, but it certainly doesn't look good."

He said the company might use the time to improve its technology so it could extract the nickel at a lower cost.

He also suggested smaller companies might be able to produce nickel more cheaply and might look to acquire BHP's processing assets in the future.

"I think Australia produces something like 4 or 5 per cent of the world's nickel, mostly from the BHP operations," he said.

"And they can't now compete at the … [current] nickel price of $US16,530 [$24,355] a tonne.

"I think BHP probably needs something north of $US20,000 a tonne … to really be breaking even."

Mr Strachan said the downtime might also create broad changes as skilled workers looked for opportunities elsewhere.

"Everyone in the industry's been crying out, 'We've got a skills shortage,'" he said.

"And all of a sudden … there are people being made available.

"I think we're going to see quite a lot of people changing chairs in the mining industry more broadly."

Big decisions loom for nickel refinery workers

Local workers at the nickel refinery in Kwinana, less than 50km from Perth, will soon face a difficult decision: Change industries and stay in Kwinana or take another job within BHP, likely on a fly-in fly-out basis.

It is an option the WA secretary of the Australian Manufacturing Workers' Union, Steven McCartney, says is concerning and not suitable for everyone.

"These people have to either live away from their family and make choices about that or not have a job," Mr McCartney said.

"They probably don't want to be one of those statistics, which is a high statistic, about marriages and families that fall apart because of fly-in fly-out [work].

"That might be why they're working in Kwinana.

"That was never assumed. All [BHP] said was, 'We'll get you a job somewhere around Australia.'"

Indigenous people 'terrified'

Kado Muir is a native title holder for Tjiwarl country, which covers the town of Leinster, and said there were dozens of Indigenous people working for the mining giant who were worried about what the changes would bring.

In the six years since an Indigenous Land Use Agreement was signed between BHP and the Tjiwarl people, Mr Muir said 50 Tjiwarl locals had been employed, resulting in a positive flow-on effect for local Aboriginal businesses and the economy.

"It would be good to see them deployed into roles, into their communities and that's what it boils down to, otherwise we end up with a drain of people out of our region into other regions and that's just not sustainable," he said.

"I've been following some of the Facebook posts of Tjiwarl people who are employed by BHP and they're terrified.

"They don't want to be going to someone else's country to work on their lands, they want to be on their country, making a living on their lands."

He said there was opportunity for them to be reskilled to work in other local mining businesses or trades, and called on BHP, the state and federal governments to do more to help the transition.