Australian miners have cut 38,000 jobs between May 2012 and the end of 2014. That’s a reduction of almost 14% of the total workforce and, according to a new survey, more cuts are coming.
That’s the finding of the latest Newport Consulting annual survey of 50 mining executives reported in The Australian this morning. The survey shows that 80% of the 50 executives polled say they are planning on reducing headcount in 2015-16. That’s a big increase on last year’s 50%.
While those respondents who said they were “cautiously optimistic” in the industry doubled from a catastrophic 8% last year to a terrible 16% this year, Newport Consulting managing director David Hand told the paper that:
“On the down side, supply chains are suffering, employment is suffering, mines that cannot be run profitably are being closed and there are a lot more redundancies coming.”
What’s clear in the report is that mine managers are getting to the end of their tether. In a sign of how close to the edge some mines are, one unnamed executive said in the report:
“We will maintain controls on spending, capital expenditure is at a minimum and we have made redundant thousands of people. We don’t believe we can cut more. If the market does not improve, we will close mines and put them on a care and maintenance regimen.”
The survey also suggested that the pain is spreading from the miners themselves to ports that service them and the rail contracts that get product to the wharves.
David Hand told the paper that miners “are renegotiating their take-or-pay contracts, which will have a contracting impact of more mine closures and a fall in revenue and profitability for the rail, port and shipping companies as the mining downturn continues to bite”.
You can read the full story here.