BHP cuts 300 staff in Pilbara

By the Editorial Team · Thursday, October 15, 2026

BHP is cutting 300 jobs in its Pilbara iron ore operations due to weakening demand and rising costs in the Australian mining sector. This move reflects broader industry pressures, including declining Chinese steel consumption and increased expenses from geopolitical-driven diesel price hikes, which are impacting major producers like Rio Tinto and Fortescue Metals Group.

BHP announced a reduction of 300 positions in its Pilbara operations amid ongoing challenges in the Australian iron ore sector. The decision follows recent signals of weakened demand and rising costs impacting major mining companies in the region.

Last week, Fortescue Metals Group issued a rare profit warning ahead of its quarterly production report, citing a steep decline in shipments to Chinese buyers. The slowdown reflects softer steel consumption in China, the world’s largest consumer of iron ore. Rio Tinto reported on Wednesday that escalating diesel prices, driven in part by geopolitical tensions linked to US President Donald Trump’s policies in the Middle East, could add more than $530 million to its operating costs in the Pilbara this year.

In its September quarter production update, Rio Tinto confirmed that increased diesel expenses are expected to raise Pilbara mining costs by approximately $1.10 per tonne for the full year ending December 2026. Despite these added costs, the company maintains its forecast to sell between 323 million and 338 million tonnes of iron ore from its Pilbara operations this year. Rio estimated that the ongoing conflict involving Iran could cost its mining sector around half a billion dollars.

The company’s report also highlighted a 4 percent drop in domestic steel consumption within China during the September quarter. This decline was slightly counterbalanced by increased steel exports. However, Rio noted that the overall price effect from reduced Chinese demand was mitigated by a concurrent 1 percent decrease in global seaborne iron ore supply compared to the previous quarter. This contraction was largely due to higher operational and freight costs affecting smaller producers outside Australia and Africa, with shipments from regions excluding Australia and Guinea declining an estimated 8 percent month-on-month in September.

Rio’s Pilbara operations yielded 83.4 million tonnes of iron ore during the September quarter, a 1 percent decrease year-on-year, while sales reached 85.7 million tonnes. For the first nine months of 2026, total production increased 3 percent to 245.7 million tonnes compared to the same period in 2025.

Shares in Rio Tinto and BHP closed slightly lower following the reports, with Rio slipping 0.32 percent to $160.48 and BHP down 0.7 percent at $60.86. The recent developments underscore the complex challenges facing Australian miners as they navigate fluctuating demand, rising costs, and geopolitical uncertainties.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.