The outlook on the future of the mining industry has become even bleaker this week, as global miner GlencoreXstrata's decision to axe workers took this week's toll to more than 1,000 jobs lost in the industry.
Citing weak coal prices and higher mining costs as well as the Australian dollar remaining high, Glencore has axed a total of 450 jobs between its Newlands and Oaky Creek mines, located in Queensland. As quoted in The Australian Financial Review, the company said in a statement that "this is a difficult decision but one that needs to be taken in the current challenging economic conditions".
Joining Glencore this week in axing workers across the industry have been some of Australia's largest miners, such as Newcrest Mining (ASX: NCM) – which will trim jobs from its Lihir mine and Brisbane office as the company continues to struggle to find its feet – as well as Rio Tinto (ASX: RIO) and BHP Billiton (ASX: BHP). Forty employees in Rio Tinto's iron ore division were affected as the company announced positions would be forced to move or be made redundant, whilst 30 workers received similar news in BHP's Energy Coal division.
Foolish takeaway
Although the news is terrible for the unfortunate employees, mining companies have been under immense pressure to cut operating costs and sell off non-core assets in order to regain long-term sustainability.
The Australian Financial Review says "good quality Australian shares that have a long history of paying dividends are a real alternative to a term deposit." Get "3 Stocks for the Great Dividend Boom" in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!
More reading
- Rio suspends Mozambique coal exports
- BHP sells off 15% stake in Jimblebar mine
- Rebound in iron ore price keeps miners' hopes alive
- 5 healthy stocks for your portfolio
- What to do as the ASX turns south
Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned in this article.
