Automation to Cost 500 Mining Jobs

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Rio Tinto has taken a big step towards automation, unveiling a $518 million plan to use driverless trains in Australia in its Pilbara iron ore region. The company said that the move will boost output by 60 per cent by 2015.

The move by the world’s no.2 iron ore company threatens the jobs of 500 train drivers, although Rio Tinto said it does not plan to replace all its drivers since about one-fifth of the network will still need human drivers.

By getting rid of human drivers, the company said they will have more flexibility in train scheduling and help increase the capacity of their 1,500 km network.

"Automation will help us meet our expansion targets in a safe, more efficient and cost-effective way," Rio Tinto iron ore chief executive for Australia and iron ore, Sam Walsh said in a statement.

With the local skills shortage driving up wages, salaries for drivers have increased to more than $100,000 a year. The move has been seen by outsiders as move to cut employment costs.

Whilst Rio did not specify how much money it would save by switching to driverless trains, they view driverless trucks and automation as a chance to increase competitiveness.

“Expanding Pilbara iron ore production is a high-return and low-risk investment for Rio Tinto that will enhance shareholder value,” Walsh said.
 

Rio stated explicitly that the move is not a trade-off between finances and workers.

"This is not just about job losses. That's not what this is about. This is about us remaining competitive," Greg Lilleyman, president of Rio Tinto's Pilbara operations, said on Australia Broadcasting Corp radio after the announcement on Monday.

The announcement has attracted criticism from unions. The Construction, Forestry, Mining and Energy Workers' Union claims the company’s sole interest was in profitability.

 “This is all about profitability at the expense of workers and workers' jobs,” the union's Gary Wood told the ABC.

Earlier this month, Rio Tino posted annual net earnings of US$5.8 billion. The company has stated they have plans to lift production capacity in Western Australia from 230 million tonnes a year to 283 million tonnes by mid-2013 and with further expansion to 353 million by mid-2015.
 

Contributor:   Mining IQ Editorial

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