Coal news and updates

Rio Tinto to merge copper, coal units

RIO Tinto has announced a corporate restructure that will see its main product groups compressed into four units.

The move comes amid a broader cost-cutting drive that reportedly could see hundreds of jobs cut from its WA iron ore operations.

The mining giant (RIO) said its coal and copper operations would be combined as part of the changes, while uranium would join the diamonds and minerals division.

It leaves all its assets to fly under four banners: aluminium, copper and coal, diamonds and minerals, and iron ore.

Current copper boss Jean-Sebastien Jacques will assume the reins of the enlarged copper and coal operations, while Alan Davies will head the diamonds and minerals division.

The moves will see current energy head, Harry Kenyon-Slaney, depart the company.
“These changes are part of our continuing business transformation to reduce costs, simplify and strengthen our company and deliver sustainable value for shareholders,” Rio Tinto chief executive, Sam Walsh, said.

“I would like to thank Harry for the important contribution he has made during almost 25 years with the group, including as a colleague on the Executive Committee for the past five years.”

The new arrangements come into effect immediately.

The news follows morning reports that hundreds of jobs were set to be cut from its iron ore operations in Western Australia.

The cuts are seen imminent and follow a hiring freeze initiated by Rio’s iron ore boss Andrew Harding at the start of the month.

“The scenario for 2015 and beyond reinforces the absolute need for us to maintain our position as the lowest-cost producer, particularly when compared with other Pilbara producers,” Mr Harding wrote in a note to staff earlier this month, according to media reports.

“To maintain favourable cash cost earnings, we must substantially and quickly decrease our operating costs. We also cannot let go of tonnes, both new and incremental.”

Rio has long held a market leading position on costs in the iron ore sector, though rivals Vale and BHP Billiton have been closing the gap recently, with some reports suggesting Vale may now be the lowest cost producer.

The cost-cutting drive from all sections of the market comes as iron ore prices have slumped more than 50 per cent over the past 12 months and currently sit at $US62.50 a tonne, just 2.2 per cent above the five-and-a-half-year low reached earlier in February.

source: http://www.theaustralian.com.au