Rio Tinto to lay off 14,000 worldwide

COPPERTON — Mining goliath Rio Tinto Group, parent company of Kennecott Utah Copper, said Wednesday that it plans to reduce its net debt by $10 billion by the end of 2009 and cut 14,000 jobs worldwide.

"We will have to identify some jobs for reductions. There will be layoffs," Kennecott spokeswoman Jana Kettering told the Deseret News. "We don't know exactly which roles will be eliminated."

Rio Tinto officials said in a statement that the cuts will impact 8,500 contractor positions and 5,500 of its own employees. Those cuts are expected to save the company about $1.6 billion. Rio Tinto employs more than 97,000 people worldwide, not including 15,000 contractors, and has about 2,400 workers in Utah.

Rio Tinto spokesman Ian Head said there were no details yet on where, when or how the staff cuts would come. The Rio Tinto statement anticipated severance costs of about $262 million.

"We're working our way through the implications of this," Head said. "We don't expect to know more until sometime in the first quarter of next year."

Kettering said Kennecott president Andrew Harding has been communicating with employees in recent weeks about the potential impact of the economic downturn.

"I'm sure people are concerned, but they shouldn't be surprised, based on the commodity prices," Kettering said. She noted that copper prices have gone from about $4 a pound this past summer to about $1.40 this month.

Rio Tinto officials are telling workers in Utah to "stay safe" as they work, because "people can get distracted by these types of announcements," Kettering said.

Nicolette Jorgensen and Fausto Valdez, who both work for Kennecott contractor Ready Industrial, are concerned about the layoffs but confident that they will have jobs next year.

Standing outside of the Ore House Saloon after work near the base of the Bingham Canyon Mine late Wednesday afternoon, Jorgensen and Valdez said Kennecott needs contractors like Ready Industrial to maintain equipment and the conveyors that move ore, in order to keep mining operations going.

Valdez said it would cost Kennecott time and money to replace the services it would lose if Ready Industrial was caught up in the fallout of Rio Tinto's layoffs.

"I don't really think that they'll do that," Valdez said. His bosses have been reassuring leading up to Rio Tinto's announcement this week. "I'm pretty confident about it."