Did You This: Cliffs, Atlas, BHP cut jobs as price crash hits Australian miners

Thermal Coal Stocks
Thermal Coal Stocks

Australian miners are slashing jobs in response to critically low raw materials prices, with iron ore miners and coal producers alike making severe cuts in headcounts to adjust to the new pricing climate.

Iron ore producers Cliffs Natural Resources, Atlas Iron Ore and BHP Billiton have all been reported to have reduced employee complements at their Australian iron ore operations in the past month.

Cliffs contractor BGC, which provides mining and civil services to the US iron ore producer, has cut a proportion of its 950-strong workforce at Cliffs’ Koolyanobbing mine in recent weeks.

“Through productivity and efficiency improvements at Cliffs’ Koolyanobbing mine, our labour contractor BGC has been instrumental in streamlining and best aligning our resources for the operation,” a Cliffs spokeswoman told Steel First.

Cliffs did not confirm the number of jobs cut at the mine, but said that the reduction in headcount would not affect targeted sales or production volumes from its Asia Pacific Iron Ore business segment.

Benchmark prices

Benchmark 62% Fe iron ore prices have almost halved since the beginning of the year, dropping from more than $130 per tonne cfr China in January 2014 to less than $78 per tonne on Monday September 29.

Prices for 58% iron ore have fallen by 43% from the start of the year, from $118.73 per tonne to Metal Bulletin’s index calculation on September 29 of $67.90 per tonne cfr China.

The Australian press has reported that Atlas Iron, a mid-tier producer of 58% Fe grade iron ore, also cut jobs, with around 40-70 permanent roles being affected.

Atlas also uses contractor BGC, which is reported to have eliminated about 50 jobs from Atlas Iron’s Wodgina iron ore mine.

Neither Atlas nor BGC responded to requests for comment at the time of publication.

The latest round of job cuts in Australia’s iron ore sector follows a paring down of logistics staff at BHP Billiton’s Port Hedland operations.

The mining major imposed job cuts at the iron ore terminal in Western Australia earlier this month in an attempt to slash costs, but did not disclose how many positions would be affected.

Coking coal cuts
While coking coal prices have held relatively steady over the past six months – in comparison with the steady decline in iron ore prices – producers continue to scale back operations, citing the poor outlook for the steelmaking raw material.

Last week, coking coal mining major BHP Billiton Mitsubishi Alliance (BMA) announced 700 jobs cuts across its coking coal operations in Australia.

BMA, the largest employer in Queensland, said that the job cuts were part of a continuing review of its operations. The cuts represent 8% of the miner’s Queensland staff.

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