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Rio’s Mongolia Mine to Fire Staff Amid Copper Market Challenges

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Rio Tinto Group will cut jobs today at its Oyu Tolgoi copper and gold mine in Mongolia following a review aimed at reducing costs.

“Workforce reductions are part of the life cycle of a mining business,” Craig Kinnell, chief executive officer of Oyu Tolgoi LLC, said in an internal memo sent to staff today and obtained by Bloomberg News. It didn’t say how many jobs would be cut. “Given where we are in the life cycle of our project, and the urgent need to reduce our costs, it is critical to the success of the business to address this now.”

Enkhtsetseg Samban, a spokeswoman for Oyu Tolgoi in Ulaanbaatar, confirmed job reductions are happening today though declined to give the number of positions affected when contacted by phone.

The cuts come at the project that has seen its expansion stalled due to a funding dispute. Rio Tinto and Mongolia’s government have been in talks for more than a year on funding the underground expansion of the mine. When negotiations stalled last August Oyu Tolgoi laid off 1700 workers and suspended construction of the mine shafts.

“Copper operations around the world are facing significant challenges with volatile markets and prices,” Kinnell said in the memo to staff. “Oyu Tolgoi is no different.”

Rio controls Oyu Tolgoi through its Turquoise Hill Resources Ltd. (TRQ) unit, which has a 66 percent stake in Oyu Tolgoi LLC. The Mongolian government owns the other 34 percent.

 

SOURCE: news.mn




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