Arrium Mining Closes Iron Ore Mine, Cuts 600 Jobs in Australia

Desperate times call for desperate needs. Mining company Arrium announced it will close its Southern Iron project in Australia due to declining iron ore prices, eradicating roughly 600 jobs in the process.

The move isn’t surprising. Iron ore prices are at a five-year low and down 45 percent than previous years. The decline puts Arrium in a position where it is absorbing cash despite vast achievements in cost reduction and capital expenditure.

"One of the concerns we obviously had was that this could put the entire business in jeopardy," Arrium’s chief executive of mining, Greg Waters said.

The closure of the Southern Iron project will see 200 full-time positions go, along with 350 contractors.

"This significant fall in pricing has put enormous pressure on iron ore mines across Australia, including in the NT and WA. South Australia is not immune," said Tom Koutsantonis, South Australia’s Mineral Resources and Energy Minister

"My thoughts are with the affected workers, contractors and their families who are receiving the news.

"I have spoken directly with Arrium Mining's chief executive and expressed my disappointment with the decision.

"Arrium has indicated it will honour all employee entitlements and look at opportunities for deployment of affected workers, where possible."

According to Federal local MP, Rowan Ramsey, the company had been dealing with a huge drop in iron ore price since the mine opened.

"The mining will cease, I would have thought immediately.”

"We would all hope that the falling iron ore prices is temporary, but it's not likely to be temporary for two weeks," Ramsey said.

"It's going to take some time for some of the economies to pick up and start using more steel, so it may be some time."