SYDNEY, June 26 Atlas Iron Ltd has cut
about 30 jobs from its operations in Australia in a bid to
reduce costs as prices for iron ore weaken amid a mounting
The move by Atlas, a relatively small producer in the
Pilbara iron ore belt, with an annual production target of about
10 million tonnes, follows a series of layoffs by sector major
BHP Billiton , which is also grappling with iron
ore prices that have tumbled by nearly a third since January.
Atlas Managing Director Ken Brinsden said the job cuts come
as the company nears completion of expansion work at one of its
mines, Webber, meaning it was moving from the construction phase
to one focused on production.
"As project development gains pace down the track, our
workforce will again change with it," Brinsden said in a
statement emailed to Reuters.
"This approach ensures that we keep a tight lid on costs
across the cycle while at the same time enables us to have
access to the labour needed to take full advantage of our growth
BHP employs about 16,000 people in its iron ore division. It
is looking at further layoffs after eliminating 170 mining jobs
and 100 office positions this year.
Iron ore .IO62-CNI=SI stood at $93.70 a tonne on
Wednesday, having stayed below $100 for more than five weeks.
Brinsden has previously said he expects iron ore to average
between $100-$120 a tonne over the next several years, but
maintains price swings were inevitable given the spot indexing
The company has provided cash operating cost guidance of
$49-$52 a tonne, though additional "all-in" costs leave less
room for profits.
Sea-traded iron ore supply growth of 10 percent over the
next 12 months should continue to outpace demand growth,
according to Jefferies.
Australia's Bureau of Resource and Energy Economics this
week dropped its price forecast for iron ore to $94.60 a tonne
in 2015 from a previous forecast of $100.80, citing growing
competition to sell into China's steel market.
Although steel production in China is forecast to increase in
2015, competition among iron ore exporters to sell their
additional production is expected to intensify.
(Reporting by James Regan; Editing by Muralikumar Anantharaman)