Fed: Rio to cut up jobs as aluminium prices, demand falls

AAP General News (Australia)
04-07-2009
Fed: Rio to cut up jobs as aluminium prices, demand falls

SYDNEY, April 7 AAP - Rio Tinto Ltd will shed 135 full time jobs and 570 contractor
positions after slashing bauxite production at its Weipa mine in Queensland and pulling
back on a refinery expansion project.

The decision to slow construction of the Yarwun alumina refinery expansion in Gladstone
and cut 2009 bauxite production by 22.7 per cent to 15 million tonnes, from 19.4 million
tonnes last year, follows sharp falls in prices and demand for alumina and aluminium.

As a result, around 100 permanent roles at Weipa and some 570 contractor roles in Gladstone
will be lost.

As well, about 35 permanent roles will be shed at the Yarwun refinery and at Boyne
smelters, also in Gladstone.

Rio Tinto head of Alcan bauxite and alumina Steve Hodgson said a depressed market due
to the global economic crisis and downturn meant "tough decisions" are 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 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 are being implemented
across all of Rio Tinto's 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 affected employees receive their full entitlements
and have the support and assistance they need in the coming weeks.

Rio Tinto shares fell 8.9 per cent, or $5.25, to $53.85 at 1143 AEST.

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KEYWORD: RIO TINTO

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