News Column

BHP Billiton to cut thousands of mining jobs

June 25, 2014

THOMAS FITZGERALD



MINING giant BHP Billiton is looking to cut up to 3,000 jobs in its mining operations in Western Australia as it seeks to reduce costs, following the significant drop in the iron ore spot price of over 30 per cent so far this year.


The London-listed resources group, which was one of the largest in the world by 2013 revenues, has already cut 500 jobs, including 100 jobs at its Perth HQ, as part of an ongoing review by consultants McKinsey, with thousands more jobs likely to follow from the company's 16,000-strong iron ore division.


Many of the potential 3,000 jobs losses are likely to involve contractors not having their contracts renewed when their positions current term comes to an end, according to reports by the Australian Broadcasting Corporation.


The once booming mining industry has hit hard times recently with the iron ore spot price recently dropping below $90, far below the $140-150 price seen in recent years. The market is seen as being in a structural surplus as Chinese demand has weakened with slower growth while production has risen dramatically around the world.


Last month, Andrew Mackenzie, BHP chief executive, confirmed that the company had cut capital expenditure by 25 per cent this year, with further reductions planned for 2015.


BHP would not confirm the exact number of jobs that might go, but stated it had "engaged external consultants" to assist with its organisational review, and said it had been "open with our employees about the review".


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Source: City A.M. (UK)


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