BHP Billiton subsidiary South32 has announced a series of restructuring initiatives that will reset the cost base of its operations at Worsley Alumina, Illawarra Metallurgical Coal, Australia Manganese and Cerro Matoso.

At its Worsley Alumina operation, the company is planning to reduce 390 employees and contractors before the end of FY16, in addition to reorganising mining and refining into two operations.

The company also plans to optimise the coal to gas fuel mix in the co-generation power facility and reduce 34% in sustaining capital expenditure to around $41m in FY17.

"The initiatives that we have announced today across our Australian and Colombian operations are central to our strategy."

South32 CEO Graham Kerr said: "The initiatives that we have announced today across our Australian and Colombian operations are central to our strategy.

"Operating unit costs, including sustaining capital expenditure, will move sharply lower at our Illawarra Metallurgical Coal, Cerro Matoso and Worsley Alumina operations, mitigating cash outflows and solidifying their position at the low end of industry cost curves.

"In addition, the reconfiguration of our leading Australia Manganese mine, GEMCO, will ensure that it becomes a positive contributor to free cash-flow at current prices."

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

South32 plans to reduce at least 300 employees and contractors at its Illawarra Metallurgical Coal operation before the end of FY16.

The mine reduced its employee and contractor headcount by 100 and operating unit costs by 34% over the 18 months to the end of December 2015.

South32 anticipates pre-tax restructuring costs, including redundancies, of around $10m at Illawarra in the first half of 2016.

The company will also lose 82 employees and contractors at its Australia Manganese operation and at least 350 employees and contractors at its Cerro Matoso operation before the end of FY16.