Australia’s Mining Unions Worried Rio Tinto Manpower Cuts Will Create Ripple Effect in Sector

It may just be a simple corporate realignment of priorities, but Australia's mining unions are worried that the programmed job cuts by global miner Rio Tinto PLC could create a ripple effect in the country's mining sector.

CFMEU likewise said the rising domestic costs and continued lower world prices in the Asian market, which Rio Tinto PLC cited as major reasons for its' downsizing, is a reality even other miners face, and this could possibly affect other projects in the Galilee Basin.

"If you've got Rio Tinto PLC, them as a multinational laying people off, and then you've got these huge mega mines that are going to start in the Galilee Basin, you have to question how viable they're going to be and what else is going to happen to the thermal coal industry in Queensland," CFMEU district president Steve Smyth was quoted as saying by Australian Mining.

Rio Tinto PLC may just be very well the first domino to fall in the region, the ABC reported. A precedent that could signal more job cuts from the other mines.

"If Rio Tinto are doing theirs then obviously Xstrata and others who are also in the thermal game will be looking at what they may do next," Mr Smyth.

"Rio, whether or not they're doing it because ... profitability's gone out of the market or they've got some issues I really don't know, but it certainly will make other thermal producers sit up and think and obviously in the Galilee Basin as well."