By Robb M. Stewart
MELBOURNE--Mount Gibson Iron Ltd. (MGX.AU) said Thursday it will
lay off about 270 workers, slow mining and cut pay for senior
managers to curb costs and help it ride out a fall in commodity
prices.
"The immediate market outlook remains uncertain," Chief
Executive Jim Beyer said Thursday in a statement to the Australian
stock exchange. "The only prudent course of action is to implement
comprehensive measures that control costs and enable our operations
to remain cash positive."
The company said it is targeting savings of between 120 million
Australian dollars (US$124.5 million) and A$150 million, mainly by
cutting back mining and working through current stock piles of iron
ore.
Mount Gibson maintained its sales target of between 8 million
and 8.5 million tons in the financial year to June.
Iron ore prices fell to their lowest level in nearly three years
in September as Chinese steel mills ran down inventories, but have
recovered some of the decline in recent weeks.
Mount Gibson said its shipments of iron ore rose by 52% in the
three months ended September from the previous quarter to 1.76
million tons. But the amount of iron ore it mined during the
quarter fell to 1.64 million from 2.2 million tons in the prior
quarter.
Mount Gibson's shares rallied on the news, and were trading 13%
higher at A$0.75 at 0001 GMT against a broader market trading up
1.1%.
Write to Robb M. Stewart at robb.stewart@wsj.com
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