Top global miner BHP Billiton said it plans to cut an undisclosed number of jobs in iron ore, its biggest and most profitable business, as it tries to cope with weaker demand and prices, higher costs and a strong Australian dollar.
The cuts in the business that made up more than half of BHP's operating earnings last year reflect weaker Chinese steel growth, first flagged by the company in March, which lead it to shelve a $20 billion expansion of its Port Hedland iron ore port in Western Australia.
Iron ore producers have been hammered by a 42 percent drop in prices from this year's high to a low of $87 last month. Prices have since rebounded to $110, but remain below what had been seen as a floor price at $120.
BHP said on Tuesday it had reviewed the iron ore division and was letting employees know about a reorganisation plan, which would result in some job cuts.
BHP Billiton Iron Ore's belief in the longer term attractiveness of the iron ore market remains unchanged, the company said in an emailed statement.
However we have spoken for some time about the challenges facing the resources industry, and we are not immune from the current global conditions.
BHP employs just under 6,000 people in its iron ore unit, out of more than 46,000 in the company worldwide excluding contractors, but declined to say how many jobs would be cut.
Most of the people whose positions were being eliminated would be offered opportunities elsewhere in the business or elswhere in the company, a spokesman said.
There are currently approximately 900 open roles available across the iron ore business but until the redeployment process has been completed, it is too early to say how many people will be made redundant, BHP said.