Warning of more mine job cuts
Woodside boss Peter Coleman has moved to soften up the public for more job cuts amid revelations that mining giant Rio Tinto is poised to make hundreds of its WA staff redundant.
Mr Coleman, chief executive of WA's biggest oil and gas producer, told a Committee for Economic Development of Australia lunch in Perth yesterday that world iron ore prices would remain low for years, putting pressure on companies to cut jobs.
The comments came as it emerged Rio Tinto, which has been hit by the massive fall in ore prices in the past year, is preparing to retrench as many as 800 of its employees locally.
Profit disclosures by Rio and BHP Billiton this month showed sharp declines in profits from their Pilbara iron ore operations, although both maintain healthy margins from their WA exports despite plunging prices.
Speaking to the ABC on the sidelines of yesterday's lunch, Mr Coleman suggested the pain washing through the resources sector from lower prices was set to last for years and it was inevitable that job losses would follow.'
"You're not going to see any real relief in the oil price short term," he said. "I would expect the current conditions to be with us for some time, it could be two or three years or more.
"If you look at the industry in the US, for example, they're already predicting there could be up to 500,000 jobs go out of the industry in the US alone. So if you take that globally, you can start to see companies are having to make very difficult choices."
Despite the warning, Treasurer Mike Nahan offered an upbeat assessment of WA's economy, saying job losses in resources were being more than offset elsewhere.
"Out of mining there's been a loss of about 11,000 jobs but overall, over the last year, there's been 40,000 jobs created in WA," he said. The Government would not fix a $1.29 billion Budget deficit by slugging households but make cuts to the public sector and push for more GST revenue, he said.
