Rio cuts jobs at Argyle diamond mine

Rio Tinto has announced it will cut staff numbers by nearly a fifth at its Argyle diamond mine.

It comes as the mine is prepared to either be sold or floated on the stock exchange, according to The West.

These cuts are the first moves for new Argyle mine chief Kim Truter, who was appointed to the position in June.

However Rio has been looking to offload its diamond assets for some time, stating in March that it had begun "strategic review" of its business that would include looking for potential buyers for its diamond assets.

It is understood that around 80 workers will be cut from the mine's 500 employees.

Rio will mainly target mid level managers and support staff, rather than front liners and miners, as it outlined in July when it announced it would slash costs globally by 10% by cutting administrative roles and support services.

A Rio spokesperson confirmed the cuts, but stated that there were no definite numbers as yet.

"Like others in the industry, Argyle is facing increasing costs," she said.

"We are looking at ways to make savings across the business.

"We cannot do this effectively without reducing employee costs and, unfortunately, this does mean some roles will no longer be needed.

"We understand how difficult this is for the people affected and will do all we can to help."

Argyle has been Rio's top diamond asset; last year producing a world record sized pink diamond.

However as the diamonds business has contributed less to Rio's bottom line, some analysts have pointed to the possibility of Rio merging its diamond assets with BHP Billiton.

"The rationale would be the creation of the largest listed diamond company with a solid asset base and lower overall sovereign risk," analysts from Nomura said.

Nomura said the outlook for the diamond industry was good and the assets of BHP and Rio both had strong growth potential.

"The market has positive fundamentals with maturing mines and growing Asian demand," it said.

In January market researcher IBISWorld said diamond mining would be one of the fastest growing industries in Australia in 2012.

 

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