BHP Billiton Considering Cutting 3,000 Jobs in Australia
BHP Billiton is looking to cut more than 3,000 jobs from its iron ore division in Australia.
The company has already eliminated more than 500 jobs in recent months, including 100 from its headquarters in Perth, and the potential for more is looming. Australia’s once-booming mining sector is rapidly disappearing as China’s demand for imported materials such as iron ore, coal and copper cools down.
Many sources around BHP’s Port Hedland port operations suggest the cuts are a result of a recent internal review conducted by managers inside BHP’s iron ore operation. A broader review was conducted by management consulting firm McKinsey and Company.
"BHP Billiton Iron Ore regularly undertakes improvement initiatives and organizational reviews as part of an ongoing focus on productivity, and we have engaged external consultants to assist with this process," a spokeswoman for BHP said.
According to sources, the review by McKinsey and Company recommended BHP shed up to 20 percent of its Western Australia workforce, or more than 3,000 positions.
"We have been open with our employees about the work being done to improve productivity, and the review, and we hold regular employee town hall meetings and question and answer sessions with the business leaders as a matter of course," the spokeswoman reiterated.
The cuts by BHP Billiton are in an effort to reduce costs to the level of major rival Rio Tinto on a per ton basis.
According to Gavin Wendt, a mining analyst for MineLife in Sydney, the cuts are eerily similar to the coal industry.
"Iron ore miners such as BHP are in the early stages of going through what the coal miners have been experiencing. In effect, they are being asked to make do with less."
Iron ore prices have dropped more than 30 percent this year. The falling prices could potentially force China to close up a fifth of its domestic mine production, actually benefiting BHP and other Australian producers.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.