Rio warns of more job losses as it cuts costs

Rio Tinto chief Tom Albanese has warned of more job cuts ahead as it cuts costs and Chinese demand weakens.

Speaking at an investor seminar last night, Albanese said the miner has managed to cut around $500 million from its costs this year alone, cuts which included Australian jobs, the SMH reports.

The cuts have been part of Rio's global efforts to reduce its expenditure by at least 10%.

''So far we've already hit $US500 million of annualised savings … and are planning further significant reductions in operating, evaluation and sustaining capital spend,'' he said.

''That will involve reductions in employment levels.''

While Albanese did not outline where jobs will be cut, he has previously stated that Rio if focusing on taking the knife to administrative and support costs rather than the front line, which it has demonstrated through its job cuts at Clermont.

Its Australian coal operations are not the only ones to be battered, as Rio announces it will also shelve plans for its Mozambique coal expansions.

It began shipping coking coal from the African operation earlier this year.

Albanese gave a poor outlook for the industry in the short term, although long term forecasts looked more positive.
"Given the considerable price fluctuations in recent times, we are somewhat more cautious on the outlook over the next few quarters," Albanese said.

"Our business remains resilient in this environment and our operations are performing better than our peers, reflecting our consistent strategy of running long-term, cost-competitive operations."

While it will scale back its global operations, it has not pulled back from its iron ore holdings, reaffirming its commitment to its development schedule at Simandou in Guinea and its expansion plans in Western Australia, despite lower Chinese demand.

Albanese's statements come only days after BHP announced it will cutting numbers at its iron ore operations in the Pilbara.

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