Rio Tinto Australia will manage both Pacific Coal’s existing assets, as well as Coal & Allied’s assets in the Hunter Valley under a management services agreement. Both companies will be managed form a office in Brisbane, which will result in a reduction in management, corporate and administrative positions for Coal & Allied.
Changes in administration, support structures and operational management will reduce cost with Coal & Allied expecting an annual pre-tax saving in excess of A$20 million.
Coal & Allied has also revised its estimated loss for 2003, from A$20 million announced last week to A$30 million to take into account approximately A$11 million as a result of the changes.
“Coal & Allied and Pacific Coal have already been successfully sharing best practice and processes in areas such as health, safety and environment and some international export marketing services, with benefits flowing to both businesses,” said Coal & Allied director Derrik Docherty.
“Coal & Allied is competing in a tough market and this decision is essential to ensure that the business remains strong and internationally competitive as a global seaborne traded coal producer.”
Management changes, to take effect February 1, include current Pacific Coal managing director Dr Grant Thorne to become managing director of Rio Tinto Coal Australia and managing director of Coal & Allied. Current Coal & Allied managing director Gary Goldberg will assume another senior executive role within Rio Tinto.
