PERTH (Reuters) - Global miner Rio Tinto (RIO.AX) said its Australian Coal & Allied Industries unit will be cutting jobs as it struggles with a steep drop in coal prices and a high Australian dollar.
Australia, the world’s second largest exporter of thermal coal used for power generation, has seen its coal prices fall over 20 percent to under $90 per metric ton (1.1023 tons) amid a global supply glut and reduced Chinese demand for fuel.
Coal & Allied produces thermal coal in Australia’s Hunter Valley region where other miners, such as Xstrata Plc XTA.L, have also moved to cut jobs in an effort to reduce costs.
“We are working to improve our competitiveness by actively seeking ways to reduce costs across our business, which unfortunately means some roles will no longer be required,” Rio Tinto said in an emailed statement to Reuters on Monday.
Rio Tinto owns a majority stake in Coal & Allied and manages its operations.
A Rio Tinto spokesman told Reuters he could not specify how many jobs would be cut because the decision was still in progress.
Coal & Allied produces 30 million metric tons of coal annually and employs around 1,500 people across its three operations in Australia’s eastern New South Wales state, according to the company website.
Australian shares fell 0.5 percent on Monday as mining stocks lost ground on weak commodity prices and expectations of weak global growth.
Reporting by Rebekah Kebede; Editing by Edwina Gibbs