Miner Rio Tinto Cuts 14,000 Jobs

Plan to reduce debt $10B also means cuts in spending on exploration
By Jim O'Neill,  Newser User
Posted Dec 10, 2008 8:28 AM CST
In this undated file photo released by BHP Billiton, an aerial views shows Olympic Dam mine in South Australia.   (AP Photo/BHP Billiton, HO, File)
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(Newser) – Global mining firm Rio Tinto will cut 14,000 jobs and scale back spending on exploration, reports the BBC, in a bid to slash its $40 billion debt 25% by 2010. The miner, the third largest in the world, said the “rapidity and severity of the global economic downturn" prompted it to cut 8,500 contractors and 5,500 employees from its 97,000-strong workforce.

Rio Tinto’s debt has driven down its share price, which was further pummeled after rival BHP Billiton abandoned a hostile takeover bid in November. Rio’s shares rose about 10% in early trading today. But analysts say a reduction in exploration could hurt the firm in the long run. "The question now is which projects they have to give up,” said one.