GLENCORE has announced it will axe 535 jobs at its zinc mines in Queensland and the Northern Territory.
The news follows a 30% hit to the commodities giant's share price late last month after an investment bank warned the company's viability was being threatened by debt and low commodity prices.
Production at the Lady Loretta mine in north west Queensland will be suspended.
Production will be reduced at George Fisher Mine in Mount Isa and the McArthur River mine in the Northern Territory.
At the Lady Loretta mine, 242 jobs will go while 224 positions will be lost from George Fisher, and 69 at the McArthur mine.In total, 535 jobs will be cut, a third of which are fly-in, fly-out.The company announced today it would reduce its zinc production by a third in Australia, South America and Kazakhstan.
It said the main reason for the reduction was to preserve the value of zinc reserves in the ground at a time of low zinc and lead prices. In a statement, the company said it needed to manage its production in the current climate.
"This decision has not been taken lightly," the statement said.
"In the coming days we will engage with all employees and put in place support services to assist our people who may be affected as a result of these changes."
Workers have been offered voluntary redundancies and there will be opportunities for redeployment.
George Fisher Mine General Manager Chris McCleave broke the news to staff this morning.
"It's a tough day to give the news, and no doubt it's a tougher day to hear this news," he said.
"It is not an enjoyable decision that's been made, but it is the responsible thing to do to preserve the value of Mount Isa's zinc resources."
As the company pledged to dramatically reduce its $US30 billion debt, resources analysts said Glencore would be reassessing all projects that required more spending to get off the ground.
Update your news preferences and get the latest news delivered to your inbox.