Mining companies lay off hundreds of workers, cut production
Major mining companies have started laying off more than 500 workers as the global financial crisis grips the resources sector.
Mining giant Xstrata will cut 190 contractors and 40 permanent workers at its Oaky Creek coal mine in central Queensland. The company also shut down half its coking coal production at its Oaky Creek Number One project in Queensland.
Australia’s largest zinc miner Oz Minerals laid off 110 workers at its Lawn Hill site, and 25 at its associated Karumba port facility in north-west Queensland on Friday.
And Macarthur Coal has announced it will lay off 180 employees and contractors across the company, as the company downgraded its first-half profit forecasts, cut its coal sales target and suspended its interim dividend due to softening coal demand.
News of the job cuts follow Rio Tinto’s announcement that it will axe 14,000 jobs worldwide.
Queensland Resources Council chief executive Michael Roche said every resource company was dealing with big falls in prices and shrinking demand.
“We are seeing quite a sharp and sudden reduction in steel production in Asia and Europe, which is impacting on coal production,” Mr Roche said.
“While it’s going to be a tough 2009 for the resources sector there is strong confidence things will pick up towards the end of 2009.”
Oz Minerals Century Mine general manager John Lamb said the company had to do what it could to survive as international metal prices plummeted.
“Making decisions that cost jobs is always difficult, but they are driven by the need to ensure Century survives this economic downturn and is around to take advantage of conditions when they improve,” he said.
“We remain committed to keeping as many people employed (for) as long as we can.”
Macarthur Coal chairman Keith De Lacy said staff had to be laid off to manage cashflow and costs.
“We are confident there will be a recovery in coal demand although we cannot predict when that is likely to happen,” Mr De Lacy said.
Australian Manufacturing Workers Union Queensland secretary Andrew Dettmer said the union was encouraging companies to reduce workers’ hours instead of laying off staff.
“I would like to see the companies’ rationale for laying off staff,” Mr Dettmer said.
“In my view, mining companies have the capacity to reduce excessive overtime and reduce the hours before laying off people.”
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