AAP reported that
although Australia's iron ore miners have been boosted by higher prices in
recent days, but analysts predict further job losses in the industry in the
year ahead.
Shares in Australian iron ore producers are further on last Friday as the price
of iron ore traded around a three month high of USD 64.77 per tonne, more than
35 per cent above the 10 year low of USD 47 hit in February.
But JP Morgan analyst Mr Tom Kennedy says the mining industry is bracing for
more job losses over the next 12 months, as private resources firms plan to
slash capital expenditure. He wrote "We expect further job shedding in the
resources sector as we descend the capex cliff. Recently announced spending
plans are indicative of a further 12 per cent fall in mining employment in the
next 12 months, equivalent to 0.2 per cent of the labor force."
Mr Kennedy added that resources investment had fallen by two per cent of
overall economic growth in the past 18 months, and based on mining firms'
investment intentions, a similar sized decline is likely over the next year.
Around AUD 80 billion in mining projects have been cancelled since the final
quarter of 2014, and labor intensity of the production phase of the mining boom
is significantly less than in the preceding investment phase. More than 50,000
jobs have been shed across the iron ore and coal sectors since 2012.
Source: Steel guru