BHP sheds jobs and costs as prices and high dollar hit

BHP Billiton is retrenching 163 workers at its Mt Arthur thermal coal operations in the Hunter Valley, as the miner takes the axe to costs in the face of depressed prices for the commodity and a stubbornly high Australian dollar, according to the Australian Financial Review.

Costs across BHP’s coal division are under the microscope, with every operation being pushed to operate independently in the black.

The job cuts at Mt Arthur are being made as part of an ongoing review to “ensure the long-term sustainability of mining operations”, BHP said.

It comes less than a month after BHP said it would pull back activity at its Goonyella coking coal mine in Queensland to avoid the operation slipping into the red.

BHP NSW energy coal asset president Peter Sharpe said Mt Arthur’s cost base needed to be “reset” if the miner was to remain globally competitive. The coal industry continues to experience low coal prices and a high Aussie dollar.

BHP, Rio ratings at risk from iron ore price fall: S&

Standard & Poor’s has warned that continued iron ore price weakness threatens the ability of BHP Billiton and Rio Tinto to maintain their cherished credit ratings while also meeting shareholder expectations for multi-billion-dollar share buybacks and increased dividends, according to The Australian.

Warning for Iluka on Kenmare takeover

Soft mineral sands prices have prompted analysts to warn that Iluka Resources should avoid overpaying in its attempt to gain control of a low-margin ilmenite mine in Mozambique, according to the Australian Financial Review.

Iluka has confirmed an approach has been made to offer scrip for the London-listed, Dublin-based Kenmare Resources, which owns the Moma mine in Mozambique and which has put a value of around $850 million on the target.

Iluka has put forward a conditional scrip offer, offering 0.036 of its shares for each share held in Kenmare, which would result in significant dilution (around a quarter) for Iluka shareholders.