BHP warns over job losses as China cools

The prospect of job cuts raises doubts about the strength of Australia’s mining boom, which has hinged on China importing hundreds of millions of tonnes of iron ore, coal, copper and other minerals year-in and year-out for most of the past decade.

In a 50-50 partnership with Japan’s Mitsubishi, BHP operates a half-dozen coal mines in Queensland’s Bowen Basin, yielding mostly metallurgical coal used in steel making. At peak output, they can supply up to a fifth of the world’s traded coal.

BHP earlier this year closed one of the mines outright, citing poor profit margins. The company’s closest rival Rio Tinto in July said it was cutting an unspecified number of jobs at one of its Australian coal mines as coal prices slid.

“Against a backdrop of increasing costs and falling commodity prices, we continue to focus on reducing our overheads and operating costs,” BHP said.

“We don’t intend to provide any detail about specific adjustments, but clearly there may be some impact on jobs in some areas,” it added.

Softening demand growth in China, where the economy is expanding at its slowest pace in more than three years, has hammered prices of coal, iron ore and other commodities to their lowest levels in years, bruising the profits of miners such as BHP, Xstrata and AngloAmerican.