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BHP will cut about 300 jobs at its Western Australian iron ore operations as weaker prices and rising fuel and shipping costs squeeze margins, Bloomberg reported.
The positions will go at South Flank, Mining Area C, Newman and Jimblebar in the the Pilbara iron ore region in Western Australia, where BHP employs about 16,000 people.
A BHP spokesperson said the group would look for other employment opportunities for affected workers.
“We are making some changes to ensure our WA iron ore business can continue to make a significant contribution,” the spokesperson said.
Iron ore prices have fallen about 14% since the start of the year, while mining and freight costs have risen, partly because of higher fuel prices.
BHP warned in its full-year results in August that the cost environment had “shifted materially” because of the conflict in the Middle East. Higher energy prices were feeding into inflation and supply-chain costs, it said.
The pressure is also being felt by rival Rio Tinto. The group said in its quarterly production report on Wednesday that higher diesel prices had added about $1 a ton to operating costs in the Pilbara.
BHP expects to produce as much as 298 million tons of iron ore in its current financial year.
Rio Tinto, its closest rival in the Pilbara, produces about 366 million tons a year.