The incoming CEO of Anglo-Australian major Rio Tinto has announced pending major cutbacks amid a harsh downturn in worldwide demands for metals and minerals. Falling demands from mainland China—the world’s largest importer of iron ore, copper and other industrial commodities—have had a hard impact on a mining industry that had been riding high with its breakneck industrialization.
With a “streamlined executive committee structure,” cash cost savings are under way, said CEO Sam Walsh; no target details were outlined in his statement. Companies servicing China’s industrial needs have faced sobering news. Moreover, this week witnessed announcements of 7.7% Q1 growth from 2012—a grim reduction resonating among global miners.
Rio Tinto has slashed hundreds of jobs under Walsh, while poorly performing assets including copper and coal have been slated for sale or closure. Still, the world’s No. 2 iron ore miner has announced 2013 plans to continue bolstering output to 265 million metric tons (mt) under a multibillion-dollar expansion.
Meanwhile, at their second-biggest copper project, Rio officials announced they could experience a 100,000-mt output reduction after their Kennecott mine experienced a slide along a geotechnical fault line of its northeastern wall last week.
Rio officials are hopeful of commissioning their massive Oyu Tolgoi copper and gold mine in Mongolia by the end of the second quarter, pending negotiations with the government in Ulan Bataar over local employment and taxes.