Mineral sands producer Iluka Resources will cut 200 jobs and significantly downsize its Mid West operations, after its profits fell one third over the past year.
The Mid West miner went on the offensive late last week, signalling drastic measures to “curtail” its plummeting sales.
Iluka’s net profi t fell to $363.2 million last year, down from $541.8 million in 2011.
Sixty-five jobs will be axed in April from Iluka’s mining operations at Eneabba, as part of the measures outlined by the company.
Significant stops will also be made at Iluka’s Narngulu plant, with some kilns to remain open at a reduced rate of operation.
Iluka managing director David Robb said last year’s production exceeded sales as a result of weak market conditions, and action had to be taken to slow production.
“Prioritising cash flow and balance sheet conservatism has meant that fixed costs have had to be reduced,” he said.
“A significant proportion of these costs relate to direct and indirect employees and so, regrettably, a significant number of Iluka employees, as well as contracting staff, will lose their jobs.
“While measures were taken to curtail production in 2012, prudent planning for a gradual recovery in demand through 2013 means that further actions to reduce production and lower costs are necessary.”
Mr Robb said he expected the market to pick up this year, citing early indicators for improved demand.
Iluka hopes such actions will lower its productions costs to $375 million from $583 million in 2012.At close of business Friday, Iluka’s shares were at $10.23 per share.