(Minews) - Wage changes, continued hiring freezes and service contract reviews have been flagged in a leaked document outlining Rio Tinto's latest cost-cutting strategy within its iron ore division.
In a memo sent to employees, the miner's chief executive for Iron Ore operations Andrew Harding outlined actions the company would take to remain competitive this year.
Mr Harding said this included renegotiation of significant service and supply contracts, a significant reduction in warehouse and stockpile inventories and a review of organisational structures.
He also flagged the extension of an immediate hiring freeze, which the company introduced last year.
Mr Harding said he will also implement quarterly reviews directly with superintendents at all iron ore sites across the country and reduce scheduled maintenance task times.
He described the agenda as "a large one, but not unmanageable".
The plan comes as iron ore hits record lows, with the price halving in the past 12 months.
The CFMEU's mining and energy secretary, Gary Wood, said he did not expect the plan to have a major impact on workers.
"You sort of wonder what's behind this," he said.
"Our initial thought is it's shareholder driven, letting them know they're reacting to the market, but when you look into it, it's really just about cost cutting and being prudent in their management style."
He said the hiring freeze may impact some contractors, but is in line with the economic climate of the resource sector.
"If [Rio Tinto] wants to increase their tonnage from 290 million to 360 million tonnes [of iron ore shipped a year], they're going to need labor," he said.
"They're trying to drive down the costs and they'll do that through suppliers who will be paying the ultimate price in negotiations.
"You have to remember, when the price of iron ore was high, the Australian dollar was high and as the Australian dollar has gone down, the iron ore prices have gone down but at the same time [Rio's] production has gone up and they've become more efficient.
"From a workers' point of view, we don't think it will have a major effect."
A spokeswoman for Rio Tinto refused to elaborate on the content of the document, but said in a statement the miner was focused on maintaining market competitiveness in challenging industry conditions.
"For some time now our people have been pursuing cost and productivity improvements," the spokeswoman said.
"We are constantly examining all parts of our business in order to remain strong and globally competitive."
Rio Tinto is set to publish its full-year results for 2014 on Thursday.
Rio closed up 39 cents today to $60.70.
