REPORT: BHP Billiton to Cut 700 Jobs at Coal Mines in Australia
Mining giant BHP Billiton Ltd. (ASX:BHP) (NYSE:BHP) announced on Tuesday it plans to cut roughly 700 jobs from its metallurgical coal business in central Queensland due to high operating costs and declining prices.
BHP Billiton Mitsubishi Alliance, a joint venture between BHP and Mitsubishi Corp., said it plans to cut the jobs from its Bowen Basin coal mines in Australia. The job cuts will account for about seven percent of the joint venture’s total workforce.
"The coal industry continues to face challenging market conditions and had to act to ensure the long-term viability of the business," the BHP Billiton-Mitsubishi Alliance (BMA) said in a statement.
Coking coal prices have been trading at their lowest levels in seven years as supply for the commodity outpaces demand. Prices for the black gold have fallen 20 percent this year alone.
"When we started looking at cost restructuring we were around $150 a ton, coming down from $200, and now we are down around $110," said Dean Dalla Valle, president of BHP’s coal division.
"And we've had a pretty sticky forex rate in this country. This all follows a period of pretty inflationary cost growth over the past four or five years."
BHP and other Australian miners have invested billions of dollars over the past decade in new projects as prices for iron ore and coal have been on the rise. The drop in price and slowdown in demand, however, has caused many companies to cut jobs and cancel expansion plans.
"A slowdown in China's manufacturing marks low demand from an economy which Australia relies on heavily for commodity exports," a spokesperson from CMC Markets said.
Like other Australian mining companies, BHP is continuously reviewing its coal division, looking for additional ways to cut costs as it attempts to push every operation to function independently.
"It comes back to the world sets our price but Australia sets our costs so we've just got to make sure we are matching them up," said Dalla Valle.
Despite the 700 job cuts, BHP Billiton is sticking to its guidance of increasing metallurgical coal output by four percent to a record 47 million tons in 2015.
Newmont acquires Canada’s GT Gold in $325mn deal
Newmont, the world’s biggest gold miner, has acquired Canada’s GT Gold in a deal worth $325mn. The gold giant now controls the Tatogga gold-copper project in the Traditional Territory of the Tahltan Nation.
“With the acquisition of GT Gold and the Tatogga project in the highly sought-after Golden Triangle district of British Columbia, Canada, Newmont continues to strengthen our world-class portfolio,” commented Newmont President and CEO Tom Palmer.
“We look forward to continuing to build a respectful and meaningful relationship with the Tahltan Nation, including the community of Iskut. The relationships we have with Indigenous communities, First Nations and host communities are critical to the way we operate. We will partner with the Tahltan Nation at all levels, and with the Government of British Columbia to ensure a shared path forward as the Company understands and acknowledges that Tahltan consent is necessary for advancing the Tatogga project.”
Newmont’s acquisition includes the Tatogga project, comprised primarily of the Saddle North deposit, which has the potential to contribute future significant gold and copper annual production. There are also further exploration opportunities beyond the known deposits at Saddle North within the land package. The Tatogga project adds to Newmont’s existing interest in the prospective Golden Triangle through the company’s 50% ownership in the Galore Creek project.
Newmont is the world’s leading gold company and a producer of copper, silver, zinc and lead. A world-class portfolio of assets, prospects and talent is anchored in favourable mining jurisdictions in North America, South America, Australia and Africa. The American miner is celebrating its 100th anniversary this month.
With gold prices on the rise, the last six months has seen gold industry M&A activity accelerating. A recent Mckinsey report, advises that the industry need to be mindful of mistakes made during the previous gold price boom, when growth was chased unidirectionally by several companies.