Mining Giant Cuts Iron Ore Price for Asian Mills
As industrial demand crashes, Rio Tinto, which is the London-based mining giant, has been forced to offer a temporary price cut to Asian steel mills.
Industry executives said that the miner has offered to slash iron ore costs by a fifth. And the pain is not confined to iron, which the company mines in the wastelands of Western Australia.
The expansion of one refinery will be slowed down, and production of bauxite will be hacked back by a fifth at its Weipa mine. The company’s latest plan of job cuts are to shed 14000 jobs across the world, which is about 12.5% of its current workforce.
Rio Tinto is now in the midst of its annual round of negotiations with steelmakers, but the talks appear to have stalled as Chinese factories seek cuts of 40% or 50%. The company woes come as it battles shareholders over its controversial tie-up with Chinalco. Meanwhile, is thought to be close to re-opening negotiations with the Chinese state-controlled aluminium firm’s board as it seeks to win investor approval for the deal.
As a result, the company’s shares slid 48p to 2160p.
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