More mining canaries croak

ScreenHunter_12 May. 01 18.48

By Leith van Onselen

It’s been a bad few months for mining-related industries.

In early May, I noted how falling mining equipment sales could be a harbinger of a sharper than expected reduction in mining capex.

Over the remainder of May, we then witnessed a spate of mining services firms – Coffey, UGL, Worley Parsons, Transfield Services, and Boart Longyear lower their earnings guidance and/or cut jobs amid slowing mining activity.

The bad news has continued this week, with a spate of job cuts announced by Australian coal mining companies, with Peabody Resources, Downer EDI, and Glencore Xstrata all slashing jobs and cutting output.

Now, heavy machinery dealer, WesTrac, which supplies Caterpillar machinery such as bulldozers and trucks to miners and builders, has today announced that it will cut 350 jobs – roughly 10% of its workforce – amid “challenging market conditions”.

With around 10% of Australia’s workforce employed in mining-related activities, according to the RBA, and both mining capital expenditures and commodity prices falling from record highs, these types of announcements are likely to be only the beginning.

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Leith van Onselen

Comments

  1. Free_Market_Delusion

    Surely a D11 Caterpillar Dozer can transition its skills to building more houses?

    • Yep and that follows the other big eastern Cat Dealer Hasting Deering announcements last week of several hundred layoffs.

      I don’t get it. There should be an all out assault by Govt’s to reduce the many imposed costs on Business generally right now. That’s not the core problem of course but it IS something that they can do to effectively help the situation and help restore some confidence.

      • But they shouldn’t reduce business taxes right? Otherwise the deficit would be even worse.

        It’s going to be interesting to see the right-wing response when it comes to choosing between Fed Budget surplus and supporting business.

  2. Ajaydee73MEMBER

    I work for another large plant and equipment company, and we are struggling. We have been shedding employees since February and the job cuts have been accelerating lately.