Rio Tinto sacks 40 employees from West Angelas near Newman, in Western Australia’s Pilbara region

Cutbacks like this are rare, given Rio Tinto still makes a staggering profit shipping iron ore to China.

Australian mining giant Rio Tinto has sacked a group of staff working at an iron ore mine near Newman, in Western Australia’s Pilbara region, and scaled back the proposed developments of two other sites nearby.

About 40 production staff at the West Angelas mine were sent packing after turning up to site for their shift this week, The West Australian reported.

Rio Tinto confirmed there were job losses.

“We continually look for ways to align our workforce with ongoing operational requirements to ensure we have the right number of people working in the right roles,” a spokesperson told the publication, without confirming the number of job cuts.

Rio still makes large profits shipping product to China, and cutbacks in its core operation iron ore workforce are rare.

On Thursday iron ore closed at US$102.17 per tonne.

The West Angelas mine was built 20 years ago at a cost of about $1 billion. It has the highest running cost of Rio’s 17 iron ore mines across the Pilbara.

Australia could miss out on $70 billion a year in export revenue if it does not pivot quickly enough to “green iron” as countries like China decarbonise their supply chains, a new report claims.

A haul truck is loaded by a digger with material from the pit at Rio Tinto Group's West Angelas iron ore mine. Picture: Ian Waldie/Bloomberg via Getty Images

By becoming a world leader in green iron, Australia could double its export revenue to $250 billion, according to the Climate Energy Finance (CEF) think tank.

“However, failure to overcome the technical and economic challenges of green iron would mean Australia risks the reality that our iron exports could halve, as traditional importers restructure and decarbonise supply chains, and prioritise regions of high-quality iron ore and low-cost ironmaking,” CEF said in its report published last week.

Australia is the world’s biggest iron ore supplier with 56 per cent export market share.

Nearly all of Australia’s iron ore exports are in the form of hematite, which is shipped overseas to countries like China where it is processed in coal-powered blast furnaces to produce iron. The iron is then refined into steel in electric arc furnaces.

The entire process produces enormous amounts of carbon dioxide, accounting for 6.7 per cent of global emissions. Green iron technologies promise to reduce those emissions by up to 90 per cent.

BHP, Rio Tinto and Fortescue all have green iron projects underway, with Fortescue set to open a pilot plant next year.