A number of works have been cut at Rio Tinto’s Yarwun facility as the low alumina price continues to bite.
A document sent to workers earlier this week highlighted the operation’s “ongoing review to align our structure with the new Yarwun operating model”, and as part of this realignment “a number of our colleagues were notified that their positions will be made redundant”.
Yarwun refinery general manger Colin McGibbons declined to state how many workers would be cut, citing Rio Tinto’s policy to not disclose worker figures on these matters, according to the Gladstone Observer.
Of those made redundant, some have been redeployed within Rio Tinto or given new positions at Yarwun.
McGibbons added redundancies payouts will be “well above” Fair Work standards.
The job cuts were driven by a falling alumina price and operational standards at the site, with McGibbons stating the plant was in the worst quartile for production efficiency and cost per tonnes.
According to Glencore CEO Ivan Glasenberg’s presentation at the Bank of America Merrill Lynch conference earlier this week, alumina’s price has been on a downwards spiral since 2014, whilst supplies themselves have increased by 110 per cent since 2003, creating an oversupplied, undervalued market.
This situation is compounded by falling demand, which is forecast to slip from an average growth rate of six per cent seen between 2003 and 2015 (the highest average for base metals) to less than four per cent in 2016.