Singapore 25/02/2016 - South32 said Thursday it will axe more than 1,000 jobs with at least 350 employees and contractors from the Cerro Matoso ferronickel operations in Colombia before the end of its fiscal 2016 as part of a move to increase labour productivity and reduce costs.
The 350 positions is 18 percent of total headcount at the Cerro Matoso operations.
“To ensure Cerro Matoso remains competitive amidst declining ore grades and an increasing reliance on stockpiled ore, the operation must significantly increase labour productivity and reduce costs,” the company said.
Its cost-cutting initiatives are expected to deliver a 30 percent reduction in operating unit costs, including sustaining capital expenditure, to approximately $3.90 per pound in fiscal 2017 at Cerro Matoso.
Other than the layoffs, other initiatives at Cerro Matoso include continued aggregation of its procurement activities to the region - which is expected to delivery around $37 million in savings – as well as a 56 percent reduction in sustaining capital expenditure to around $16 million in fiscal 2017.
South32 is axing at least 1,122 jobs at its Australia and Colombia operations, this including around 390 at Worsley Alumina, at least 300 at Illawarra Metallurgical Coal, and around 82 at Australia Manganese.
“Operating unit costs, including sustaining capital expenditure, will move sharply lower at our Illawarra Metallurgical Coal, Cerro Matoso and Worsley Alumina operations, mitigating cash outflows and solidifying their position at the low end of industry cost curves,” said Graham Kerr, South32’s CEO.
The announcement on Thursday follows the 620 job cuts at its South Africa Manganese operations announced in early-February.