* BHP says is pushing to become more cost efficient
* Move comes amid softening outlook for iron ore sector
* BHP declines to confirm report up to 3,000 jobs could go
(Adds details of job cuts, closures in other mining sectors)
By James Regan
SYDNEY, June 24 BHP Billiton is
looking at more job cuts at its flagship Australian iron ore
division as a way to reduce costs, as ore prices slump and
pressure mounts to rein in spending.
The possibility of more cuts comes as thousands of jobs in
Australia's once-booming mining sector disappear in response to
cooling demand growth, mainly from China, for imported
industrial materials such as iron ore, coal and copper.
A BHP spokeswoman said it was not possible to put a number
on how many jobs could be targeted and declined to confirm an
Australian Broadcasting Corp radio report that the figure could
"Iron ore miners such as BHP are in the early stages of
going through what the coal miners have been experiencing," said
Gavin Wendt, a mining analyst for MineLife in Sydney. "In
effect, they are being asked to make do with less."
More than 12,000 jobs in Australian coal mining have been
lost since 2012, including those from BHP's mines, as the
industry combats falling prices and stiff competition from
countries like Indonesia.
BHP, the world's biggest miner, employs about 16,000 people
in its iron ore division. Earlier this year, it said 170 jobs
would go at its Whaleback mine in the Pilbara iron ore belt. A
further 100 people have been let go at the division's Perth
Iron ore prices .IO62-CNI=SI. have dropped more than 30
percent this year due to slowing demand growth in China, the
main market for Australian ore.
Elsewhere, Rio Tinto has said its Gove
Alumina refinery in the country's north can no longer operate
profitably and will close. Alcoa Inc is due stop
production from its Point Henry aluminium smelter near Melbourne
FOCUS ON COSTS
"This is about continuing to safely improve our business and
ensuring we are a competitive, world-class operation," BHP's
spokeswoman said, adding that reducing the payroll was part of a
wider focus to contain costs.
She said external consultants were being brought in to help
find ways to lower overheads and improve productivity.
BHP Chief Executive Andrew Mackenzie last month said the
company's overall capital spending had fallen by 25 percent and
would decline again in the 2015 financial year.
Increased iron ore supply from major miners in Australia and
Brazil has overwhelmed Chinese demand, leading some miners to
boost discounts for lower grade ores.
BHP is still expanding its iron ore operations after late
last year commissioning its Jimblebar mine in the Pilbara iron
Forecasts by Australia's Bureau of Resources and Energy
Economics due out on Wednesday are expected to show downward
revisions for export earnings for most industrial commodities,
although production and export volumes may rise.
The sharp drop in iron ore prices could force China to close
up to a fifth of its domestic mine prouduction, which could
eventually benefit BHP and other Australian producers, which can
mine higher-grade ore and ship it to Chinese steel mills for
less cost, according to an analysis by consultancy Wood
Profit from iron ore, BHP's biggest business, rose 60
percent in the first-half of fiscal 2014, while petroleum
earnings fell 16 percent and copper rose just 0.4 percent.
(Editing by Richard Pullin)