Workers at Andrew Forrest’s Fortescue Metals have lost their industry-leading rosters as the iron ore miner slashes further, trying to match costs to falling iron ore prices.
Rosters will move to a two weeks on, one week off cycle. This replaces an eight days on, six days off system which was the envy of other Pilbara workers.
“While we would prefer not to have to change what has been a successful and differentiating roster for Fortescue, we are taking steps in response to the threat of oversupply in the market over the medium term,” says CEO Nev Power.
The pure play iron ore miner is heavily exposed to fluctuations in iron ore prices, which have fallen 60% in a year, as well as any movements in the Chinese economy.
Smaller players, with higher costs than the big miners, are already in trouble with Atlas Iron mothballing its mining operations this month and a number of mine service supplies losing business.
At Fortescue, Power says the roster change will further bolster the company’s resilience in an “uncertain and volatile market”.
The new roster will be in place by June 30.
“While Fortescue took a disciplined decision to cut its capital expansion budget last year and defer additional capacity in our system, it is the threat of oversupply in the medium term by our competitors that is causing ongoing damage to our industry, all companies in it and to the state and national economies,” Power says.
“In this environment, bringing our costs down rapidly and sustainably is critical and will place our company in the strongest possible position for the future.”
Fortescue’s first half profit was down 81% to $331 million.
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