Sydney: The world’s biggest miner, BHP Billiton, said Thursday it would cut 400 Australian contract jobs as rival Rio Tinto shut down an iron ore smelter, in response to weakening global commodities demand.
Confirming that 400 contract jobs would be lost in Queensland state, a spokeswoman said BHP believed metallurgical coal output for 2009 would be approximately 10-15% below capacity.
“We adjust our contract requirements to suit the level of activity of our business,” Samantha Evans said.
BHP announced in January it would cut about 6,000 jobs worldwide in response to the global economic downturn, saying it expected to lose contractors as conditions deteriorated.
The mining union said the cuts were a concern.
“We don’t know whether this means some of the planned expansions are not going ahead, or if they are mining to a lesser extent,” said Steve Pierce, of the Construction, Forestry, Mining and Energy Union.
The news came as rival Rio Tinto announced the temporary closure of an iron ore smelter in Western Australia, citing depressed pig iron prices and poor market outlook.
A skeleton staff would be kept on to maintain the Kwinana plant with most workers relocated to other Rio projects, the company said.
“This is a tough decision but unfortunately one that relates directly to the current market conditions and the uncertainty of a market recovery in the near term,” Sam Walsh, chief of Rio’s iron ore operations said in a statement
Rio has already said it will axe 14,000 jobs.
Debt-laden Australian mining companies have attracted the attention of China’s state-owned metals sector, with takeover proposals from Beijing’s Minmetals and Chinalco for OZ Minerals and Rio Tinto respectively being considered by Australia’s foreign investments review board.
Hunan Valin Iron and Steel Group last month took a 16.5% stake in Australia’s Fortescue Metals.