BHP plans to cut more jobs at Australian iron ore unit
Reuters
Published Jun 24, 2014 04:17
By James Regan
SYDNEY (Reuters) - BHP Billiton is planning to cut more jobs at its flagship Australian iron ore division as it seeks to reduce costs, following a slump in iron prices.
A BHP spokeswoman said it was not possible to put a number on how many jobs would be targeted, and declined to confirm an Australian Broadcasting Corp radio report that the number could reach 3,000.
The world's biggest miner, which employs about 16,000 people in its iron ore division, announced earlier this year that 170 jobs would go at its Whaleback mine in the Pilbara iron ore belt. A further 100 people have been let go at the division's Perth headquarters.
Iron ore prices have fallen more 31 percent this year due to slowing demand growth in China, the main market for Australian ore.
"This is about continuing to safely improve our business and ensuring we are a competitive, world-class operation," BHP's spokeswoman said, adding that reducing the payroll was part of a wider focus to contain costs.
BHP is currently expanding its iron ore operations after late last year commissioning its Jimblebar mine in the Pilbara iron ore belt.
However, Chinese buyers are being offered discounts by Australian miners to maintain sales as increased supply from major miners has overwhelmed demand growth. ID:nL4N0P029Z]
The sharp drop in iron ore prices could force China to close up to a fifth of its domestic mine production, which could eventually benefit BHP and other Australian producers, which can mine higher-grade ore and ship it to Chinese steel mills for less cost, according to an analysis by consultancy Wood Mackenzie.
Profit from iron ore, BHP's biggest business, rose 60 percent in the first-half of fiscal 2014, while petroleum earnings fell 16 percent and copper rose just 0.4 percent.
(Reporting by James Regan; Editing by Richard Pullin)
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