Workers at the Roy Hill iron ore mining project owned by Australia’s richest woman Gina Rinehart are facing a crucial decision process where the result seems to reach a no-win end. The billionaire asked her employees to accept a reduction in their salaries so they can keep their jobs.
Prices of steelmaking ingredient iron ore has recovered to around $62 a ton from a low of $46.70 a ton in April, fueled by a fall in stockpiles at China’s ports. But analysts predict this won’t be much of a trigger to push the prices to its glorious days. Prices are forecast to hover in the US$55 to US$65 range in the near-term. Goldman Sachs gave a less favorable scenario. It expects prices to dip below $50 a ton again due to the continuing oversupply.
The cloudy forecast has prompted iron ore miners to undertake drastic measures to maintain operational stability. A number resorted to cutting down the number of its workforce, while others settled for a compromise with workers to accept pay cuts.
Chief executive Barry Fitzgerald said 60 percent of the workforce at the $10 billion Roy Hill iron ore mining project will receive pay cuts by between 5 percent and 10 percent. New employees will be offered lower salaries.
About 540 workers will be affected. Fitzgerald himself said he will receive a 10 percent pay cut. He likewise assured half of the company’s “lower remuneration band” employees will not be offered the cuts.
“We felt it was more important for our people to retain their jobs rather than pursue workforce reductions as a cost-saving strategy in response to market conditions,” Fitzgerald told Reuters.
He mentioned the 5 percent and 10 percent salary slash they are telling workers is still the lowest compared to the reduction efforts their competitors have undertaken, which range from 26 percent through to 47 percent on the published information.
Rinehart’s Roy Hill iron ore project currently has 600 people. It will peak to 2,000 once fully operational. A breakdown report by ABC News said an employee in the lower bands working on the site can earn an approximate base salary of $75,000 in the future. This can expand to $100,000 depending on site allowances, shift allowances and roster allowances. A tradesperson, meantime, can earn about $130,000.
The mine is already over 85 percent complete. First exports are expected to begin by end September.