bcworld

Ouch! BHP has been very quiet while Rio has been openly suffering.

http://www.news.com.au/business/stor...-31037,00.html

RCoight

Yahoo news story here: http://au.biz.yahoo.com/090120/2/244lm.html

worzel

That has been suspected for quite a while. What still surprises everyone is that their iron ore mining does not seem to be affected - per the official announcements anyway. They are still claiming their Rapid Growth Project 5 is going ahead despite everyone else reducing operations. If they do a Rio-scale announcement there will be well over 10,000 staff, contractors and subbies affected.

I spoke to someone I used to work with (Rio) this morning and her division has lost over half of its jobs with just a week to get out the door, although they are getting reasonable severance packages. The woman I spoke to has lost 3 of her 4 staff, including a good mate of mine who just had his second baby in 18 months. Very sad.

nickyjohnt

My friend has just rung me this morning, Her husband has just been laid off and the mine closed down in Ravensthorpe.

This is the second time in 2 months and they are on a 457 visa !

Nicky

renth

This is all happening very fast. If you had predicted this, even 6 months ago you would have been told you were insane.

NKSK version 2

I just had a look at their ASX announcement this morning which everyone was preciting would show slashed output for the first half of 2009FY. It seems that it has been business as usual and they weren't lying after all!

themerlin

The bigger the bubble the bigger the bang when it bursts!

worzel

As far as I can gather (and this is from public info), their contracts have been hit as hard as Rio's. But while Rio has scaled back production, BHP has sold its surplus on the spot market at no profit or possibly even a loss. That either suggests they believe this is a blip or, as I suspect, they are trying to make themselves look better than Rio in order to make their share price look better than ours and push us into selling up to them.

worzel

Maybe not 6 months ago but I was predicting a couple of months ago that Australia wouldn't be immune and that when it happened WA would be one of the hardest hit areas due to the reliance on the resources sector.

America stops buying => China stops manufacturing => China stops buying raw materials. It is very basic really.

bcworld

I don't think BHP will be looking at Rio again until Rio has done something about its US$40b debt problem. Who wants to be taking on that kind of burden at this time?

bcworld

Some people used to say though that China was urbanising, and that their export industry was only a part of the story. That's fair enough as well, because if any country has the cash to plough into infrastructure it's probably China.

The missing part though was the now millions of Chinese who have been laid off from factories, they are now heading back, unable to find work, to the rural areas they came from, so the urbanisation story falls down.

worzel

Maybe not the whole company but they know Rio needs to raise $10Bn this year to service debt and needs to sell some large businesses / mines to do that. The Pilbara is the one it wants and if Rio sells that you know we got really desperate.

NKSK version 2

Interesting - I saw a news clip on the The Age today stating that a bank (UBS) was saying that BHP may make a fresh bid for Rio. How conveniently announced.

I think there should be a ban on positive rumourage as well as negative!

http://business.theage.com.au/busine...0121-7luw.html

worzel

I remember the CEO of Rio stating that only a tiny proportion of China's GDP was for internal use. But it doesn't take much to start a chain reaction of job losses and confidence hits, as you say.

TheDangerousQuietOne

Now is definitely the time to be making sure you have a good skill set that's in demand. A lot of mines that have been short staffed for years are soaking up the skilled unemployed to fill their vacancies.

I'm just glad I'm working in the coal sector and I'm trying to move to a mine that produces mainly thermal coal as this is possibly the only area which isn't closing mines (as far as I know). Thank god people are still sucking up power.