The global recession struck the remote town of Ravensthorpe in Western Australia two weeks ago with the kind of venomous lightning attack normally associated with the region’s deadly Tiger snake.

Without warning, BHP Billiton, the world’s largest mining group and a chief beneficiary of the waning China-fuelled resources boom, shut its poorly performing nickel mine nearby and axed close to 1,500 workers, who represented more than half the region’s entire population.

The decision, which has been blamed partly on a massive fall in world nickel prices, came just eight months after the opening of the mine, which the community had expected would run for decades.

The stunning turnround in the fortunes of Ravensthorpe and the neighbouring coastal settlement of Hopetoun is a stark reminder of what could be in store for many communities in Western Australia and Queensland, Australia’s two boom mining states, as the global economy grinds into reverse.

The Minerals Council of Australia estimated on Tuesday that more than 9,200 mining jobs had been lost in Australia during the past four months from a growing list of domestic and international groups – including Rio Tinto, Macarthur Coal and Xstrata.

Australia is fighting back to protect its economy. The central bank cut its benchmark interest rate on Tuesday to 3.25 per cent, an almost half-century low that still provides flexibility for further cuts. Hours earlier, the government announced its latest fiscal stimulus package, lifting the amount it plans to pump into the economy to A$52bn ($34bn, €26bn, £23bn). The government also cut its economic growth forecast for the year ending June 30 from 2 per cent to 1 per cent and said it expected unemployment to rise to 7 per cent next year, from a current 4.5 per cent.

Signs that Australia’s uninterrupted growth streak of almost 17 years is about to end are manifest.

The premises of upmarket electrical retailer Bang & Olufsen in Sydney’s affluent Double Bay suburb lies vacant; there have been thousands of job losses in the financial services sector at banks – including Westpac, Macquarie and ANZ; and Qantas, the nation’s flagship carrier, is battling to counter the effects of a sharp drop in passenger bookings.

The smaller communities that rely heavily on the mining sector will feel the pain acutely. “The whole shire has been decimated,” says Brenda Tillbrook, president of the Ravensthorpe Shire Council and a farmer. “BHP bought hundreds of people in to live locally and they built more than a hundred homes. They promised us the world, in that it was a safe investment for 25-30 years, but they closed the mine eight months after opening.

“The town of Hopetoun is going to be a ghost town. Many of [BHP’s] contractors will go bankrupt,” she says.

Rick Besso, president of the Ravensthorpe Regional Chamber of Commerce and a local businessman, counts himself as one of many facing financial ruin. “They [BHP] treated us like a camp,” he says. “They simply packed up and left.”

“The price of houses was about A$120,000 and then they shot up to A$500,000 and are now back to A$200,000,” he estimates. “Young families decided they would raise families here. Now they don’t have jobs, but still have mortgages to pay.”

Small enterprises, some of which were encouraged to set up by BHP, are floundering after acquiring businesses at what now seem inflated asset values.

Bruce McNally, a schoolteacher and local activist whose daughter owns a local hardware shop, says she has been left with an inventory that “has moved way beyond what they need” as the slowdown hits.

The influx of people drawn by the boom continues. Mr McNally said families from South Africa, Mexico, the Philippines and other countries had arrived with work visas in recent weeks. “They got off the aeroplanes and go into Hopetoun and are told they don’t have jobs.”

BHP says it is doing what it can to limit the pain. It has agreed to buy back the homes of some employees, hopes to redeploy 200 axed workers into other mines and ioffered 14 weeks’ salary plus other payments to workers made redundant.