Rio Tinto cuts Argyle production, jobs

Rio Tinto Ltd will cut production and reduce the workforce at its Argyle diamond mine in Western Australia to conserve cashflow and reduce debt amid the global economic downturn. The global miner on Wednesday said an underground expansion would be "slowed to only critical development activities", resulting in a reduction in the workforce and demobilisation of contractors. "Given global market conditions, we will also reduce diamond production by taking an extended maintenance shutdown of the diamond processing facilities for up to three months, commencing in March," Argyle Diamonds chief operating officer Kevin McLeish said in a statement. Rio Tinto did not quantify the number of job cuts or the output reduction and spokesman Gervase Greene was not immediately available for comment. The miner is planning to axe about 14,000 jobs worldwide and reduce capital expenditure by up to $US5 billion ($A7.55 billion) this calendar year to help conserve cashflow and reduce debt. Rio Tinto has about $US40 billion ($A60.37 billion) debt on its books after acquiring aluminium producer Alcan Inc. The action at Argyle follows Rio Tinto's decision this week to suspend an underground expansion at the Northparkes mine in NSW, defer an automated train program in WA and postpone an expansion to its Corumba iron ore mine in Brazil. The suspension at Northparkes resulted in the loss of 346 jobs. Commodity prices have sunk amid the global economic crisis as demand has slowed, with many producers forced to cut output and shed jobs to remain competitive. Over the past four weeks, Rio Tinto has deferred part of the underground expansion of its Argyle diamond mine in WA and reduced output from the Kestrel coking coal mine in Queensland by 15 per cent. ----news.theage.com.au