Rio warning job cuts loom at coalface
THE aura of invincibility continues to fade from the mining industry, with Rio Tinto confirming that redundancies are afoot at one of its Queensland mines.
THE aura of invincibility continues to fade from the mining industry, with Rio Tinto confirming that redundancies are afoot at one of its Queensland mines.The resource major said a review of the Clermont thermal coalmine in central Queensland had not been completed but was certain to lead to redundancies.Rio has been conducting a cost review across its global business in recent months, which has led to reform suggestions for corporate and operational levels of the company.It was unclear yesterday whether the focus on Clermont was an aspect of the 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.Rio reported this week that the Clermont mine a joint venture with several Japanese companies had produced thermal coal at an elevated level over the past three months, offsetting production cuts suffered during a weather-affected first quarter.But sliding thermal coal prices have been eroding the profitability of the sector recently. Rio is also expected to shelve $2 billion in expansion spending for another Australian thermal coalmine, the Mount Pleasant mine in New South Wales.The company has also been increasing its coal operations in Mozambique, where it is now producing thermal and coking coal.Earlier this year, BHP Billiton confirmed it was closing the Norwich Park mine in Queensland, in what was believed to be the first coalmine closure in Australia since the global financial crisis.The peak of the mining boom appears to have passed, with most commodity prices and most resources stocks fetching significantly lower prices than they were several months ago.