Anglo-Australian mining major Rio Tinto said Wednesday that job losses at its Hail Creek coking coal mine in central Queensland were "essential" to ensure the operation remained sustainable in the current tough coal market.
The company was responding to claims by the union representing mine workers that up to 56 permanent jobs could be lost this week.
The union, CFMEU, claimed in a statement that Rio Tinto had sacked 10 long-term employees Wednesday and was maintaining casual staff at the expense of permanent employees.
Rio Tinto in an emailed statement did not respond to the specific number of jobs the union said would be lost.
"We will minimise the impact on employees where possible, however contractors will continue to be a part of our workforce," the company said.
The allegation the miner was leaning towards contract workers over permanent staff in Queensland was raised several times at the company's annual general meeting in Melbourne last week by worker representatives.
Rio Tinto chief executive Sam Walsh responded by saying the miner typically hired contractors for their specialist skills and to cater for the "peaks and troughs of the industry."
An analyst source in Brisbane said he understood that both permanent and contractor jobs would be affected at Hail Creek.
Rio Tinto has been reacting to weaker global coal prices by cutting operating costs and looking to divest some of its assets, including thermal coal mines in the neighboring Australian state of New South Wales and also reportedly its Mozambique coking coal operation.
Hail Creek in central Queensland has a coking coal production capacity of around 8 million mt/year and is owned 82% by Rio Tinto, 8% by Nippon Steel, 6.67% by Marubeni Coal and 3.33% by Sumisho Coal Development.
