Anglo’s Cutifani Sees Grim Outlook for Mine Sector
(Corrects first paragraph to show that the comments relate to Australia in story originally published June 26.)
“It does look pretty grim, certainly for the thermal coal industry,” Cutifani said in a speech today to a mining industry forum in Canberra.
Anglo is cutting jobs and halting production at its Aquila coal mine in Australia’s central Queensland, while Glencore Xstrata Plc (GLEN), the world’s largest exporter of power-station coal, is shedding staff at its Ravensworth mine in New South Wales state, the company said in a statement yesterday.
Peabody Energy Corp. (BTU), the largest U.S. coal company by sales, is cutting 450 contractors in New South Wales and Queensland, the company said today in an e-mailed statement. “The reductions are a response to current market conditions and ongoing actions to reduce costs,” the statement said.
Rio Tinto Group, the world’s second-largest mining company, has cut about 40 managers and senior staff in its iron ore division in Western Australia, as it seeks to cut $2 billion in costs this year across its mining and corporate offices.
“In the past 12 months alone, close to 9,000 mining jobs have been lost in New South Wales and Queensland,” Cutifani said. “Based on current press coverage, those numbers look like they are about to rapidly increase.”
Cutifani, who replaced Cynthia Carroll in April, said mining companies in Australia were still adjusting to a “slowdown in demand for commodities and lower prices.”
“We need a united plan of attack to counter this,” he said.
Companies across the mining sector are seeking to cut costs, Peter Johnston, head of nickel assets at Glencore Xstrata, told the same Canberra meeting.
“We have clearly entered a more demanding phase. Commodity prices and profits are down,” Johnston said. “It’s having an impact right across the industry.”
The resources sector must focus more on increasing returns to shareholders, he said.
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