The end of Australia’s mining investment boom coupled with weak iron ore prices and cooling demand from China has prompted mining giant BHP Billiton to consider cutting more jobs at its flagship Australian iron ore division to ease mounting fiscal pressure and reduce costs.
“This is about continuing to safely improve our business and ensuring we are a competitive, world-class operation,” a BHP spokeswoman said, adding that reducing the payroll was part of a wider focus to contain costs.
According to the article on the Business Recorder, BHP refused to put a number on how many jobs could be targeted and declined to confirm an Australian Broadcasting Corp radio report that the figure could reach 3,000.
“Iron ore miners such as BHP are in the early stages of going through what the coal miners have been experiencing,” said Gavin Wendt, a mining analyst for MineLife in Sydney.
“In effect, they are being asked to make do with less.”
Australia’s mining industry has lost 12,000 jobs since 2012, including the jobs lost at BHP’s mines, as the industry combats falling prices and stiff competition from countries like Indonesia.
BHP has brought in external consultants to help find ways to lower overheads and improve productivity, and Chief Executive Andrew Mackenzie last month said the company’s overall capital spending had fallen by 25% and would decline again in the 2015 financial year.
Profit from iron ore, BHP’s biggest business, rose 60% in the first-half of fiscal 2014, despite prices dropping by more than 30% this year due to slowing demand growth in China, the main market for Australian ore.