Miner Rio Tinto cuts 705 jobs in Alcan arm as aluminium demand slumps

MINING giant Rio Tinto has cut 705 jobs after cutting production at two mines. Rio Tinto says its Alcan arm will cut back on an expansion project and reduce bauxite production at two separate sites, resulting in the loss of 135 full time jobs and about 570 contractor positions. The decision to slow construction of the Yarwun alumina refinery expansion in Gladstone and curtail 2009 bauxite production at the Weipa mine to 15 million tonnes, from 19.4 million tonnes in 2008, followed a sharp fall in alumina and aluminium demand and prices in recent months. The decisions will result in the loss of around 100 permanent roles at Weipa and approximately 570 contractor roles in Gladstone. As well, about 35 permanent roles will be lost from the Yarwun refinery and at Boyne smelters, also in Gladstone. Rio Tinto Alcan bauxite and alumina president Steve Hodgson said the depressed market meant the "further tough decisions'' were necessary. "Even with alumina industry capacity cuts equivalent to 21 million tonnes per year since the beginning of the crisis, including cuts of 12 million tonnes made since January, there is still little improvement in the alumina price,'' he said. At current prices around 70 per cent of the industry is currently operating at a financial loss, Mr Hodgson said. Work on the Yarwun alumina refinery expansion will be slowed to reduce the rate of capital expenditure. The change to the construction schedule will result in a revised completion date in the second half of 2012. Mr Hodgson said cost reduction and cash conservation initiatives were being implemented across all Rio Tinto Alcan business units and operations. "We are strongly focused on minimising costs and conserving cash, and this work is ongoing in our operations as we continue to closely monitor market conditions,'' he said. He said the company would ensure all impacted employees receive their full entitlements and have the support and assistance they need in the coming weeks. Rio Tinto shares fell 9.26 per cent, or $5.47, to $53.63 at 11.25 (AEST).