Iron ore industry makes use of lower price

Author: Paul Ploumis13 Jan 2015 Last updated at 06:46:09 GMT

CANBERRA (Scrap Monster): But the miners have a different story to tell. The miners stated that, they are working hard to continue operations at the mine, as the margins are very tight and squeezed across the board. The Western Australia Transport Workers Union, stated that, the transport companies have asked to lower the rate and to decline the cost of the iron ore industry.

The decline in the price of the is causing distress across the whole iron ore industry, with cut off and layoffs. The latest layoff has been reported at Cape Lambert Resources, which is located in the Pilbara region. Not just the mining companies are at lost and affected by the decline in the price of iron ore.

The state secretary of Transport Workers Union, Tim Dawson, stated that, the mining companies are utilizing the opportunity of decline in the iron ore price to negotiate with the contractors and service providers. He also added that, the companies who brings up the freight up from Perth into the mining and also the companies that cart the ore for them, are definitely squeezing them, and also telling them their plan to cut rates.

The companies are definitely saving the costs, and the main agenda of their cost savings is to cut the fare and working condition of the truck drivers. The Chamber of Minerals and Energy WA stated that, the mining companies are looking forward to decline the costs, and Nicole Rook, the deputy chief executive stated that, the effort for decreasing the cost began before the decline of the iron ore price.

She also added that, in the past 12 months, there were a lot of criticism revolving around the resource sector regarding the lack of productivity. Hence, even before the decline in the iron ore price, the companies were thinking on how to increase their production to the maximum with the existing assets, and also the area where the companies could save.

The CME, stated that, the decline in the value of Australian dollars have bought in some relief, the decline in the price has led to an urgency in savings in the industry in order to maintain stability. Even so TWU rejects the comment that the iron ore industry had been bloated with high cost.