Canberra Times reported that BHP Billiton has matched the World Bank's pessimistic outlook for the Chinese economy, by confirming that job cuts are afoot within its flagship iron ore division.
Confirmation that BHP has started redundancy and redeployment talks with workers in its iron ore division coincided with the latest World Bank report predicting the slowdown in the Chinese economy will be ''more pronounced'' than expected.
The bank predicted economic growth in the East Asia and Pacific region could slow a full percentage point this year from 8.2 per cent last year to 7.2%, its lowest rate in 11 years.
Weak exports and lower investment growth was expected to cut China's economic growth from 9.3% last year to 7.7% this year.
The World Bank said that ''China's slowdown this year has been significant, and some fear it could accelerate. 'Economic momentum is expected to be weak during the coming months with limited policy easing, a property market correction, and faltering external demand.''
Weakening conditions in China spell bad news for Australian mining companies, most of which sell the bulk of their products to China.
Slumping commodities prices particularly for iron ore and coal have already produced Australia's worst trade deficit in more than four years, and BHP said changes were under way within its iron ore division.
A company spokesman said that ''BHP Billiton has completed a review of its current organisational structure to ensure it is aligned to the BHP Billiton design principles and correctly sized for the market conditions in which we operate.”
The spokesman said that ''Every effort will be made to redeploy impacted people across the business and, if necessary, the broader BHP Billiton Group. A person will only be made redundant where a suitable role cannot be found or they choose to take a redundancy package. It is too early to say how many people will be made redundant.''
BusinessDay believes about 200 jobs will be lost in total once the redeployment efforts are complete.
Cuts to job numbers have already been felt this year at BHP's other divisions, including coal, nickel and manganese.
Source - www.canberratimes.com
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