AP reported that withering cost cuts across the mining industry have left tens of thousands of people without jobs from the Arizona desert to the Andes and there is a litany of evidence that the situation is growing worse. International mining companies also have postponed or canceled projects and padlocked the gates to mines as consumers have cut spending on cars, jewelry and housing.
Rio Tinto announced last week that iron ore production, used to make steel, tumbled 18% in the fourth quarter and said that its aluminum subsidiary would double previously announced production cuts.
BHP Billiton also would slash its global work force by 6%, about 6,000 jobs as it rushes to cope with plummeting demand. BHP fourth quarter production of aluminum, copper, lead, silver and uranium oxide concentrate fell on a year over year basis.
However, zinc tonnage rose 35%, in part because of better grades, and iron ore production was up 5%, in part due to expansion projects, the company said. Unwanted copper, gold, bauxite and iron ore is piling up or being left underground as the worst recession in at least a generation saps demand.
Mr Andrew Martyn, a portfolio manager who specializes in mining for Davis Rea Limited suggested that "Expect inventories to get bigger and expect this continuing process of cutbacks. It"s going to go for quite some time here."
The effect on many communities worldwide that rely on mining has been immediate. Workers are protesting job cuts and others are expected to begin migrating in large numbers in search of work, some across international borders.
The bulk of the layoffs in the US are in base metals such as copper and zinc, although major companies also are scaling back production of metallurgical coal for use in steel manufacturing. Coal companies have slowed production from Wyoming to Australia.