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Category: Mining Industry / Coal

Miner South32 to slash nearly 800 jobs across Australia

Thursday, 25 Feb 2016 08:32:26 | Kathryn Diss

South32's Worsley Alumina refinery will shed 390 jobs after the company posted a $1.75b loss. (Supplied: BHP Billiton)

Base metal and coal mining firm South32, a spin-off from BHP Billiton, has reported a massive loss for the half-year and says it will cut more than 770 jobs across Australia.

Key points:

  • Miner South32 to shed hundreds of jobs after $1.75b loss
  • Worst-hit will be WA operations, followed by NSW
  • Move 'needed' amid global commodity price slump
  • Most jobs expected to go before end of financial year

In the six months to the end of December the company, which demerged from BHP in May last year, lost US$1.75 billion.

It is a dramatic turnaround from the Perth-based company's US$339 million profit from the year before.

It has posted underlying earnings of just US$26 million, down from US$460 million on the year before.

It did manage to reduce debt by US$286 million to US$116 million.

The company said the result was due to write downs in its coal, alumina and manganese operations, reflecting the global slump in commodity prices.

South32 Chief executive Graham Kerr said the reduction would involve reorganising management in mining and refining operations.

"When we talk about the majority of people moving out of the organisation, I'd expect the majority of those would be done by the end of this financial year," he said.

"The majority of those people, if not already spoken to, they are in the process of being spoken to over the next couple of months.

"Again that's not an easy thing for us to do, we're decreasing our workforce by about 17 per cent, based on FY 15 and if you roll back another six months when we started the demerger, there is probably a set of numbers that also come out of the business."

It's not easy, it is not something you like to do at all but it's the right thing to do for the company.

South32 Australia President Ricus Grimbeek

He acknowledged the restructure would be difficult for employees and contractors, and support would be provided to those affected.

President and chief operating officer of South32 Australia Ricus Grimbeek said breaking the news to employees at Worsley had not been an easy process.

"There will be a number of people who will be spoken to in the next couple of days to complete our process," he said.

WA, NSW worst hit by job losses

Of the Australian job losses, more than half will come from the Worsley alumina refinery in Western Australia, with 390 workers and contractors set to lose their jobs before the end of financial year.

South32 said production costs per tonne at Worsley reduced by 11 per cent during the half but it is looking to reduce them even further.

Another 300 employees will be cut from the company's Illawarra operations, in New South Wales, while 82 will go from Australian Manganese.

The news follows an earlier announcement that 620 employees would be slashed from the company's Samancor mine in South Africa.

Total revenue for the company was down 27 per cent to $2.98 billion from the same period last year.

BHP Billiton posted a $7.8 billion loss earlier this week.

AustraliaPlus


 

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