Rio Tinto Plans Job Cuts at Argyle Diamond Mine to Lower Costs
Rio Tinto Group, the world’s third- largest mining company, plans to cut some jobs at the Argyle diamond mine in Western Australia to reduce costs and improve efficiency amid a plan to sell its diamond businesses.
Some positions at the middle management level may no longer be needed, Rio spokeswoman Karen Halbert said today by phone from Melbourne. She declined to say how many jobs would be cut or how much the company would save.
Rio said in March it’s considering selling the diamond unit because the mines no longer fit its strategy. The diamond unit’s net loss widened to $38 million in the six months ended June 30 from $10 million a year earlier because of one-time charges related to higher capital cost assumptions to expand Argyle.
“Argyle is facing increasing costs,” Halbert said. “We are looking at ways to make savings across the business. We cannot do this effectively without reducing employee costs, and unfortunately this does mean some roles will no longer be needed.”
Rio is seeking to shed as many as 80 of the 500 workforce at Argyle, famous for its rare pink diamonds, the Age reported today, without citing anyone. Halbert declined to confirm the figure.
Mining companies, including BHP Billiton Ltd. (BHP), the world’s biggest, are shedding less-profitable assets as declining commodity prices and increasing costs trim earnings. Rio in August reported a 34 percent drop in underlying profit to $5.2 billion. Sales from Rio’s diamond operations accounted for about 1.3 percent of total first-half revenue, Rio said Aug. 8.
To contact the reporter on this story: Soraya Permatasari in Melbourne at firstname.lastname@example.org