BHP cuts 300 workers at Australian iron-ore mines as costs rise
Diversified miner BHP Group will make 300 workers redundant at its iron-ore operations in Western Australia as it grapples with a fall in prices of the steelmaking ingredient and higher shipping and fuel costs.
Positions will be cut at its South Flank, Mining Area C, Newman and Jimblebar mines in the Pilbara region, which have a total workforce of around 16 000. The company will look at other employment opportunities for those affected, a BHP spokesperson said in a statement.
“We are making some changes to ensure our Western Australian iron-ore business can continue to make a significant contribution,” the spokesperson said.
Iron-ore prices have fallen around 14% since the start of the year, while the costs of mining and shipping the raw material have increased in part due to surging fuel prices.
In its full-year financial report in August, BHP said the cost environment had “shifted materially” as a result of the conflict in the Middle East. “Higher energy prices have raised inflation across key regions, both directly and through their flow-on effects across supply chains,” it said.
BHP is not the only iron-ore miner in the Pilbara to feel the impact of higher costs. Rio Tinto Group, its closest peer, said in its quarterly production report on Wednesday that elevated diesel prices have increased operating costs in the region by $1 a ton.
BHP expects to produce up to 298-million tons of iron-ore in its current financial year, while Rio Tinto’s annual output sits at around 366-million tons.
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