Mining giant BHP Billiton sacks 500 iron ore workers, company slashes costs amid falling metal price

HUNDREDS of WA iron ore jobs lost as BHP Billiton slashes costs, while the Premier admits it’s not a great time for mining.

BHP Billiton’s iron ore mine at Mount Whaleback, in WA’s Pilbara. Hundreds of jobs at the mine have gone as the mining giant slashes costs.

THE world’s largest miner, BHP Billiton, has cut 500 Australian jobs out of its iron ore business.

The jobs have gone in the last month, many more are expected and are linked to an ongoing review of the business by management consultants McKinsey & Company.

However, the WA Premier Colin Barnett said reports suggesting BHP Billiton is set to slash 3000 positions from its workforce are inaccurate.

The cuts come with the iron ore spot price having plunged more than 30 per cent so far in 2014 and the miner trying to slash costs.

The iron ore spot price currently is about $US93 a tonne.

The focus during the recent boom in iron ore prices was to expand as quickly as possible and move tonnes onto ships to capitalise.

That happened too quickly, BHP Billiton chief executive Andrew Mackenzie said earlier in June, with costs that soared then now being reduced.

Among the jobs to go were 170 positions at its Mount Whaleback iron ore mine in the Pilbara and 100 roles at its iron ore division headquarters in Perth.

The iron ore business employs 24,000 people, comprising about 16,000 BHP employees and contractors.

BHP said it was using the external consultants to help with improvement initiatives and organisational reviews as part of an ongoing focus on productivity and cost reduction.

“It is about continuing to safely improve our business and ensuring we are a competitive, world-class operation,” a company statement.

“We have been open with our employees about the work being done to improve productivity, and the review, and we hold regular all-employee town hall meetings and question and answer sessions with the business leaders as a matter of course.”

The company is also reviewing NSW Illawarra coal operations and is set to cut jobs there to reduce costs.

The Premier said today: “I understand some of the media reports are exaggerated.

“BHP is certainly reducing its workforce but the numbers are likely to be in the hundreds, not the thousands, and essentially they are contract workers for whom the contracts have now expired or are about to.

“Right now, it’s not the best time in the mining industry.”

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Originally published as Mining giant BHP Billiton sacks 500 iron ore workers, company slashes costs amid falling metal price