Singapore 02/06/2016 - South32 is cutting another 270 office positions across its units, a spokesman confirmed to FastMarkets, after it decided to axe more than 1,000 jobs.
Australia and South Africa will see around 100 jobs shed from each location, the spokesman estimated.
Following the headcount-reduction exercise in February, the company conducted a "functional review" that recommended the latest cuts to "ensure the company delivers efficient functional services across operations", he said.
The latest cuts which started in recent weeks continue but all affected personnel have been informed, he added.
In February, South32 said it was axing at least 1,122 jobs at its Australia and Colombia operations to increase labour productivity and reduce costs. A least 350 were employees at its Cerro Matoso ferro-nickel operations in Colombia, around 390 at Worsley Alumina, at least 300 at Illawarra Metallurgical Coal and around 82 at Australia Manganese.
Union workers at Cerro Matoso have planned to strike from June 12 due to a wage dispute though South32 remains hopeful of averting the action via negotiations.
South32 is on track to achieve controllable costs savings of $300 million in the current financial year, South32 CEO Graham Kerr said at a Melbourne Mining Club presentation on Thursday. It is also reducing capital expenditure by $218 million in fiscal 2016.
"We remain focused on growing cash flow, rather than fixating on volume growth, and we’re demonstrating that in even the most difficult price environments we can generate cash," he said.
"The reality is prices have been worse than our low-case scenario ever envisaged. Yet, we have reduced net debt by $692 million. We are now in a position of net cash and we’ve maintained our credit rating," he added.
PATIENT ON ASSET PURCHASES
South32 is open to asset acquisitions but the timing may not be right to do so yet, Kerr also said.
“Naturally, there are some that are more attractive than others. For example, in thermal coal, due to lower demand and over-supply, we wouldn’t be keen on acquiring anything new," he said. "At the other end of the scale, I think base metals such as copper, zinc and nickel are very attractive.
But it is difficult to see how to create value for shareholders given the high prices recently paid for copper assets, he added.
"If we can’t create value, we won’t do it" Kerr said. "I am not convinced we are through the challenging price environment. I’m sure there is still more pain to come. So we can, and will, be patient."
(Editing by Mark Shaw)