Rio Tinto Group fires staff in Mozambique

10 May 2013

Anglo-Australian mining group Rio Tinto plans to reduce the number of workers it has in Mozambique due to losses posted in 2012 and projections of a similarly negative outlook this year, the group said in a statement issued Thursday in Maputo.

In the statement Rio Tinto Coal Mozambique (RTCM) said that staff cutbacks would mainly affect the prospecting and surveying area of the business, as part of structural changes underway in the company, and that replacement of foreign staff by Mozambican workers in an increasing number of roles at the company.

“Due to a drop in prices of raw materials and constraints created by coal transport and logistics infrastructure, RTCM posted losses in its operations in 2012 and, in anticipation of difficulties in the remaining months of 2013, steps are being taken to ensure the business is profitable by the end of 2013 and sustainable for the future,” the statement said.

In 2012 Rio Tinto posted losses of over US$3 billion following a downward review of coal reserves at the Benga mine, in Tete province, along with difficulties in transporting the coal away from the mine.

Transport restrictions are due to the reduced capacity of the Sena railroad, the main infrastructure for carrying coal from Tete province.

The disappointing results of Rio Tinto’s business were also a result of the Mozambican government refusing to allow the coal to be transported along the Zambezi River, due to environmental concerns. (macauhub)