BHP warns of job cuts in coal as China cools
By James Regan
SYDNEY (Reuters) - BHP Billiton (BHP.AX: Quote) (BLT.L: Quote) said on Thursday that worsening market conditions could lead to job cuts at its Australian coal mines, as slowing industrial activity in China forces global miners to scale back operations.
Global coal output is set to shrink over the next year or two as miners grapple with a combination of low prices, weak demand and currency headwinds, and high-cost Australian operations are under particular pressure.
Australia's mining boom has hinged on China importing hundreds of millions of tonnes of iron ore, coal, copper and other minerals for most of the past decade, but China's economy is now growing at its slowest pace in more than three years.
In a 50-50 partnership with Japan's Mitsubishi (8058.T: Quote), BHP operates half a dozen coal mines in Queensland's Bowen Basin, yielding mostly metallurgical coal for steelmaking. At peak output, they can supply a fifth of the world's traded coal.
BHP earlier this year closed one of the mines outright, citing poor profit margins. Closest rival Rio Tinto (RIO.AX: Quote) (RIO.L: Quote) also said in July it was cutting an unspecified number of jobs at one of its Australian coal mines.
"Against a backdrop of increasing costs and falling commodity prices, we continue to focus on reducing our overheads and operating costs," BHP said.
"We don't intend to provide any detail about specific adjustments, but clearly there may be some impact on jobs in some areas," it added, responding to a question about reports of job losses at its coal mines.
BHP employs about 10,000 at the Queensland mines, including 3,500 unionized staff already engaged in an 18th-month dispute over conditions and job protection. Continued...