Rio cuts first 100 of 800 jobs

Peter Klinger and Rebecca Parish

The relentless cost drive dominating the iron ore industry entered its latest downward spiral yesterday, with the first 100 of an expected 800 Rio Tinto workers laid off across some of the giant's biggest mine sites.

Mine site management and human resources staff from Perth began the cull at Rio's Yandicoogina, West Angelas, Tom Price and Paraburdoo sites yesterday to kick off an exercise likely to take at least two weeks.

Rio would not comment but it is estimated more than 100 jobs may have been cut as affected individuals were told, mostly before their shifts began. Some of the workers are thought to have left site immediately while others were seeing out their notice or finishing short-term projects.

The uncertainty has sparked concern about slipping safety standards in an industry that has prided itself on its much- improved practices.

Rio is understood to be acutely aware of this and is trying to carry out the job cuts as quickly as possible to prevent lingering uncertainty among its workforce.

Yesterday's actions followed Rio's confirmation last week it was planning another round of job cuts to "simplify and streamline" its WA operations.

Rio sources have hinted the job cut target is 500 though insiders expect the final number to approach 800, spread across the miner's 15 mine sites, port and rail operations, and headquarters in Perth.

Rio Tinto Iron Ore chief executive Andrew Harding this week told staff in an email, obtained by _WestBusiness _, the "challenges remain large" despite an aggressive two-year cost and productivity push that has seen $700 million in costs taken out of the division, alongside hundreds of jobs.

He told staff the "2015 transformation work" would cover maintenance, renegotiated service and supply contracts, cuts to warehouse and stockpile inventories, and the end of recruitment.

"Change is never easy and I want personally to express my appreciation at the contribution that those leaving the business have made," Mr Harding said.

"I hope you will recognise that the process involved has been fair but is also one that is necessary.

"I would like to think we can all also recognise why these major changes are being made, as well as what we now need to do to refocus our attention."

A weak iron ore price - it was last night worth $US62.24 a tonne, imported to China - has triggered the relentless cost drive and was exacerbated by arch rival BHP Billiton's stated ambition to eclipse Rio as the Pilbara's lowest-cost producer.

Change is never easy. I hope that you will recognise that the process involved has been fair but is also one that is necessary. "

_Rio Tinto Iron Ore chief executive Andrew Harding _