The noose is tightening around the mining sector with Rio Tinto the latest to announce a round of cost savings, this time no annual pay increases – for everyone including Sam Walsh!
More from Australian Mining:
“Late last year we saw market prices continue to rapidly fall. What we see ahead is very sobering,” Walsh declared.
The CEO said he anticipated 2016 would be an even tougher year than the last, with prices for commodities “now around 2005 levels or lower”, and some “down as much as 80 per cent from their highs and nearing long-term historic averages”.
“This situation is not temporary and our industry is moving into the new normal which means we must continue to be one step ahead,” Walsh said.
“The pressure this is placing on our industry is significant and it is a tough time across the sector. It is important we recognise that the pressure isn’t going to let up.
Walsh attributed the new pressures to sluggish global economic growth in the wake of the economic crises of 2009, but also because of slow growth in China and its transition from “metals-intensive sectors – like infrastructure and construction – to consumer spending.
“This decision was a very difficult one,” Walsh said of the pay freeze.
“I’m sure you are disappointed by it, as am I, but it is necessary given the market context.
“It doesn’t reflect the hard work or effort put in by everyone.”
Not just pay, but limits on travel and please, put the mobile phone down. What’s next? No jetskis? (sorry couldn’t help myself)
Next? Job cuts. This is the normal progression of things in mining busts. Get used to them.