Mining wages at iron ore miners may soon be under pressure

IRON ore giant Fortescue Metals’ roster restructure is likely to be replicated across the industry as weak prices force deep cost cutting.

FAIRFAX AND NEWS POOL ONLY: The Prime Minister Tony Abbott and the Japanese Prime Minister Shinzo Abe with CEO Rio Tinto Sam Walsh with the chief executive Iron ore Andrew Harding during their visit to Rio TintoÕs West Angelas iron ore mine in the Pilbera, Western Australia. Michael Gollschewski hosted a tour where both PMÕs met with Rio Tinto employees, toured an exhibition and took in the view of the Centre Pit. They were photographed with a Komatsu 930E autonomous haul truck, an autonomous drill display including a walk through the control room, a Hitachi EX5600 excavator and a Bridgestone truck tyre and conveyor reel. Pic By Gary Ramage. 9th July 2014. **NO ARCHIVING**

IRON ore giant Fortescue Metals’ roster restructure is likely to be replicated across the industry as weak prices force deep cost cutting.

The world’s fourth largest iron ore producer will introduce a two weeks on, one week off roster to urgently cut costs.

Fortescue says it is still making money at current prices, but the roster changes have sparked speculation other miners will follow suit to avoid the same fate as Atlas Iron, which is closing unprofitable mines.

Edith Cowan University labour economist Margaret Giles said Fortescue and other Australian iron ore miners were looking for new cost cutting measures to ensure their mines remain viable.

“Their choice is get the costs down or close the mine,” Dr Giles said.

“FMG is showing it’s prepared to look at ways to keep the mines going and I think the other iron ore miners will respond the same way.”

Wages could soon come under pressure as well, with a better match between supply and demand of skilled labour in the West Australian iron ore industry, she said.

“If some workers decide to leave the sector because they don’t want this new roster then the mining companies might decide to offer lower salaries to future workers,” Dr Giles said.

Fortescue is one of eight global iron ore miners placed on a watch for credit rating downgrades by agency Standard & Poor’s, as China’s economy slows and iron ore prices weaken.

Originally published as Mining wages at iron ore miners may soon be under pressure