SYDNEY (AP) -- Rio Tinto Ltd. said Tuesday it would cut more than 700 jobs at Australian mines due to a drop in aluminum demand and prices.
The miner said it would also slow expansion of a refinery at one mine and cut this year's production of bauxite -- the chief mineral used to produce aluminum -- by 22.7 percent to 15 million metric tons, from 19.4 million metric tons last year.
London-based Rio Tinto, the world's third-largest miner, has been slashing production and jobs worldwide to lower its debt as the global financial crisis sharply erodes demand and prices. The latest cuts are on top of the company's announcement in January that it would shed 14,000 jobs worldwide, about 12.5 percent of its workforce.
Steve Hodgson, head of Rio Tinto's Alcan bauxite and alumina business, said the depressed state of the market due to the global economic crisis meant "tough decisions" were necessary.
"Even with alumina industry capacity cuts equivalent to 21 million tons per year since the beginning of the crisis, including cuts of 12 million tons made since January, there is still little improvement in the alumina price," Hodgson said in a statement. "At current prices around 70 percent of the industry is currently operating at a financial loss."
The job cuts include 135 permanent position at two mines and 570 contractor positions.
Work on the Yarwun alumina refinery expansion, in Queensland state, will be slowed to reduce capital expenditure. The change to the construction schedule will result in a completion date in the second half of 2012.
"We are strongly focused on minimizing costs and conserving cash," Hodgson said.
The company would ensure all affected employees receive their full entitlements and have the support and assistance they need in the coming weeks, he said.
Rio Tinto shares fell 8.5 per cent to AU$54.05 in midday trading.