Rio Tinto slashes jobs and costs

1 Aug 2012, 8:56 pm   -   Source: AAP
Mining giant Rio Tinto will close its Sydney office and cut more jobs in Melbourne to slash costs. (AAP)

Mining giant Rio Tinto will close its Sydney office and cut more jobs in Melbourne to slash costs. (AAP)

Global miner Rio Tinto will soon start cutting office jobs in Melbourne and Sydney to deal with falling commodity prices and soaring costs.

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Global miner Rio Tinto will soon start cutting office jobs in Melbourne and Sydney to deal with falling commodity prices and soaring costs.

The company's small Sydney office which employs about 30 people will be closed.

A larger number from Melbourne will go, where about 240 administrative staff work in the CBD, but it would remain a corporate head office.

The roughly 200 workers at the technology and innovation research centre in the Melbourne suburb of Bundoora are not expected to be significantly affected.

Some roles will be relocated to operating division hubs in Perth and Brisbane.

Both Rio Tinto chief executive Tom Albanese and Australian boss David Peever have emailed staff in the last month about plans to cut support and service costs by 10 per cent around the globe.

They say they are building resilience and controlling costs during a difficult time, which includes commodity price falls and Europe's debt crisis.

"Like others in the industry, Rio Tinto is facing the challenge of increasing costs," the company said in a statement released on Wednesday.

"We are actively seeking ways to tackle this.

"This includes a program of reductions in service and support costs across the organisation, which have been rising sharply in recent times."

Miners are complaining about rising input costs, leading in to this month's earnings season, including wages, equipment, energy and new taxes.

Rio's first half net profit is tipped to fall to about $US4.9 billion ($A4.69 billion) from $US7.78 billion ($A7.44 billion) last year.

BHP Billiton's earnings are also forecast to drop, while the world's biggest iron ore miner Vale posted lower than expected second quarter earnings at two year lows last week.

Last month Rio confirming it would cut jobs at its Clermont thermal coal mine in central Queensland, with thermal coal prices falling with other coal projects at risk.

Iron ore prices have also fallen this year amid softer Chinese demand but Mr Albanese says the company is committed to its $US10 billion ($A9.57 billion) Pilbara iron ore expansion, taking annual production to 353 million tonnes.

Rio shares were 16 cents better at $53.36 at 1545 AEST on Wednesday.

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