Australian resource and investment company, Cape Lambert Resources Limited, has axed 117 full time employees from its operations due to deteriorating market conditions and the substantial fall in the iron ore price.
The move comes after the company conducted a thorough review of its capital management strategy and projected expenditure, which showed that the layoffs were necessary in order to maintain a healthy financial balance sheet.
Cape Lambert also stated that it would reduce its exploration expenditure, place non-core assets on “care and maintenance” and postpone second dividend payment, which all together should generate annual savings of $3.5 million.
Executive Chairman Tony Sage said the cost reduction measures and the postponement of the dividend payment were sound financial decisions at an uncertain time in the iron ore sector.
“We have seen a sharp drop in the iron ore price in recent months, coupled with a downturn in market conditions for the mining sector as a whole. With these factors in mind, Cape Lambert believes it is prudent capital management to find genuine cost savings across its business and postpone the second dividend payment scheduled for February 2015,” he stated.
”I would like to emphasise that this is a postponement, not a cancellation of the dividend payment. Cape Lambert as a company is in a strong commercial position and taking these measures is sound management to protect the company in what is a hard time for the mining sector. However, Cape Lambert is confident that the iron ore price will recover in the near-to-medium term and the dividend payment can resume in due course.”