Author: Paul Ploumis10 Feb 2015 Last updated at 03:47:33 GMT
SEATTLE (Scrap Monster): The recent communication by Rio Tinto Chief Andrew Harding to the company’s management team indicates that the mining major may indulge in a series of cost-cutting measures in order to maintain its business edge. The document distributed through email hints at several such actions across all sites.
As per the document, the company plans to negotiate on existing service and supply contracts to bring down the cost. It also aims to reduce warehouse and stockpile inventories significantly. Other cost cutting measures being proposed include immediate freeze on new hiring and thorough review of organizational structure. Moreover, the capital expenditure plans will be revised in concurrence with the prevailing market conditions. It also calls for methodical changes in scheduling maintenance activities at site.
All site superintendents will be subject to quarterly reviews to assess their performance with regards to safety, cost and productivity. The new measures may lead to loss of jobs in warehousing, inventory and procurement divisions. It may also result in cancellation of certain existing service and supply contracts. Meantime, the company spokesperson declined to provide further details.
According to Rio Tinto, the measures are aimed to counter challenging market conditions. Furthermore, these measures would help to achieve its aim to be the world’s best iron ore company. It also ruled out rumors that the company plans to cut its Australian iron ore workforce by 10% to 15%.