Thirty Hunter Jobs at XStrata Lost As Miner Wields Axe

Thirty Hunter Jobs at XStrata Lost As Miner Wields Axe

ABOUT 30 Hunter Valley coal miners face the axe after Xstrata announced plans yesterday to slash 600 jobs in NSW and Queensland in response to low coal prices, high production costs and the strong Australian dollar. 
 
Union officials in the Hunter Valley said the mining giant intended to shed about 15 frontline jobs at its Ravensworth underground mine with a similar number expected to go at its Ulan underground mine, north of Mudgee.

Construction, Forestry, Mining and Energy Union NSW northern district president Peter Jordan said members were told both mines would be scaled back from seven-day-a-week operations to five. He said delegates were "optimistic" affected staff could be re-deployed within Xstrata or managed through voluntary redundancies.

But he said there was no indication how many of the hundreds of contractors - who work at about a dozen of Xstrata's sites across the Hunter and the rest of NSW - would be impacted after the company said cuts would include both permanent staff and contractors.

BHP has also announced 300 jobs will go with the closure of its Gregory open cut at Emerald in Queensland.

"Xstrata Coal is undertaking a planned restructuring to respond to industry-wide pressures including low coal prices, high input costs and a strong Australian dollar against the US dollar. Following this review, and in keeping with the cost savings objectives announced at our half-year earnings, we will be reducing our employee numbers by approximately 600," Xstrata said.

Xstrata said cuts would also come from its corporate headquarters in Sydney and consolidating its office-based operations in Queensland.

"We do not expect a material impact on Australian production volumes," the company said.
However it confirmed growth projects at Ravens- worth North, Ulan West and its expansion at Rolleston were "proceeding"..

Mr O'Farrell said the loss of Xstrata jobs was "a body blow".

"It reflects not only national economic conditions, but it reflects a higher Australian dollar, lower prices for resources, and both are dictated by international conditions" he said.

Over Regulation Driving Mass Exodus in Australia's Resources Sector

 

The New Trend for Primary Sector resource Companies operating in Australia is to go offshore seeking reallocating their capital to projects with less overhead cost and greater certainty.

2012 Has seen the introduction of a Carbon Tax (Carbon Trading System) and a Mining Tax which combined with a heavily reduced Iron Ore price and weakening demand has seen any new or planned venture on paper, look far less economical.

There has been an incremental shift in Australian Companies increasing profiles overseas where the cost of business are seen as being significantly less such as Papua new guinea and South Africa.

The Australian Governments Justification for the Mining Tax (Resource Super Profits Tax) are basically two fold:

The Commodities Prices are rising so fast the taxation system is unable to stay in-line with the super normal profits mining companies are experiencing during this resources boom.

Most of our mining companies are majority foreign-owned and are receiving a huge windfall at the Australian taxpayer’s expense.

The Carbon Tax will also progressively increase the costs of production capabilities for miners and primary resource companies in an indirect way through increased costs such as electricity which is one key input to mining and yielding primary resources, some to a break even and shut down point where the cost of production is outstripped by costs and economics uncertainty. 

The outcome of these creeping legislation's are that incrementally Australian companies will and have been considering a more international approach as the disincentives to operate inside Australia grow to a level were companies will be forced into this position.

The eventuation is that the price put on commodities in Australia will ensure that they are plentiful for generations to come as the opportunity cost of mining in Alternate resource rich countries becomes too much. 

This Legislation is effectively creating commodities world where 3rd world countries seek out cheaper countries to do business in and in a way at least its almost like Australian Government was slow to catch on to Globalisation and outsourcing production to countries with cheaper labour and less Government Bureaucracy where businesses and economies thrive.