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May 28, 2014

Rio Tinto plans to axe 300 jobs at Oyu Tolgoi copper mine in Mongolia

Anglo-Australian Rio Tinto is planning to cut 300 jobs at its Oyu Tolgoi copper and gold mine in Mongolia.

By admin-demo

Anglo-Australian Rio Tinto is planning to cut 300 jobs at its Oyu Tolgoi copper and gold mine in Mongolia.

The decision by the mining major is intended to save costs in the face of depreciating copper prices.

The Oyu Tolgoi gold and copper project is located in the south Gobi region of Mongolia, and has around 7,500 staff and contractors.

The mine is jointly owned by Rio Tinto’s subsidiary Turquoise Hill, which holds a 66% stake, and the Mongolian Government, which owns the remaining 33%.

"Copper operations around the world are facing significant challenges with volatile markets and prices. Oyu Tolgoi is no different."

According to an unnamed Oyu Tolgoi employee, the latest job cuts were just below 5% of the total workforce at the mine and included full-time employees and contractors.

Rio Tinto was quoted by Reuters as saying in a memo to Oyu Tolgoi staff that: "Given where we are now in the lifecycle of our project and the urgent need to reduce our costs, it is critical to the success of the business to address this now."

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"Copper operations around the world are facing significant challenges with volatile markets and prices. Oyu Tolgoi is no different."

In 2013, Rio Tinto slashed around 1,700 jobs at Oyu Tolgoi mine after a $5bn underground expansion at the copper mine was put on hold, due to months of disagreement between the company and the government over taxes and royalties, as well as revenue sharing from the mine.

The company has trimmed about $2.3bn of costs from its global operations and plans a further reduction of $1bn this year.

Facing a drop in foreign investment, the Mongolian Government is preparing to restore 106 mining licences that it cancelled last year, after it was discovered that the licences were issued illegally.

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