Mining wages may be next to fall
THE world’s fourth largest iron ore producer will introduce a two weeks on, one week off roster to urgently cut costs.
Fortescue says it is still making money at current prices, but the roster changes have sparked speculation other miners will follow suit to avoid the same fate as Atlas Iron, which is closing unprofitable mines.
Edith Cowan University labour economist Margaret Giles said Fortescue and other Australian iron ore miners were looking for new cost cutting measures to ensure their mines remain viable.
“Their choice is get the costs down or close the mine,” Dr Giles told AAP.
“FMG is showing it’s prepared to look at ways to keep the mines going and I think the other iron ore miners will respond the same way.”
Wages could soon come under pressure as well, with a better match between supply and demand of skilled labour in the West Australian iron ore industry, she said.
“If some workers decide to leave the sector because they don’t want this new roster then the mining companies might decide to offer lower salaries to future workers,” Dr Giles said.
Fortescue is one of eight global iron ore miners placed on a watch for credit rating downgrades by agency Standard & Poor’s, as China’s economy slows and iron ore prices weaken.