Rio cost review signals job cuts, starting with Clermont
THE aura of invincibility continues to fade from the mining industry, with Rio Tinto confirming redundancies are afoot at one of its Queensland mines.
THE aura of invincibility continues to fade from the mining industry, with Rio Tinto confirming redundancies are afoot at one of its Queensland mines.The resources giant said a review of the Clermont thermal coalmine, although unfinished, was certain to lead to job cuts.Rio has been reviewing its global business in recent months, drawing reform suggestions for its corporate and operational levels.It is unclear whether the focus on Clermont is just an aspect of that global review or something more specific, but a spokesman said the company was committed to keeping its workers informed."Rio Tinto is looking at ways to reduce costs at Clermont mine, to improve its competitiveness in an environment of significantly lower thermal coal prices," he said."A review is under way and, although the details are to be worked out, it will unfortunately mean redundancies will be required."Rio reported this week that the Clermont mine which is a joint venture with several Japanese companies had produced thermal coal at an elevated level over the past three months, offsetting the production cuts suffered during a weather-affected first quarter.But sliding thermal coal prices have been eroding the profitability of the sector recently, and Rio has also been expected to shelve $2 billion in expansion spending for another Australian thermal coal mine, the Mt Pleasant mine, in New South Wales.Rio has also been increasing its coal operations in Mozambique, where it is now producing both thermal and coking coal.Earlier this year, Rio's rival BHP Billiton confirmed that it was closing the Norwich Park mine in Queensland, in what was believed to be the first coal mine closure in Australia since the global financial crisis.The peak of Australia's decade-long mining boom appears to have passed, with most commodity prices and most resources stocks presently fetching significantly lower prices than they were just several months ago.