The ongoing instability in the iron ore market prompted Fortescue Metals Group – Australia’s third largest producer of iron ore after Rio Tinto and BHP Billiton – to undertake a thorough organisational review and bring work rosters across its operations into line with the standard rosters worked in the Pilbara iron ore industry.
CEO Nev Power said the changes to Fortescue’s operational roster were designed to rapidly bring down the company’s costs and place it in the strongest possible position for the future.
“This will further strengthen Fortescue’s position to withstand the market challenges now and into the future. We have already reduced our cost base significantly since 2012 through sustained productivity and efficiency improvements and today’s announcement will further bolster our resilience in an uncertain and volatile market,” said Mr Power in an ASX Announcement.
The company said that its operational rosters will move from a predominantly eight days on, six days off cycle to a two weeks on, one week off cycle, adding that opportunities for internal transfers for those affected by the roster change will be fully explored to minimise the negative impact.
“While we would prefer not to have to change what has been a successful and differentiating roster for Fortescue, we are taking steps in response to the threat of oversupply in the market over the medium term,” Mr Power said.
“While Fortescue took a disciplined decision to cut its capital expansion budget last year and defer additional capacity in our system, it is the threat of oversupply in the medium term by our competitors that is causing ongoing damage to our industry, all companies in it and to the state and national economies.”
Mr Power added that maintaining worker safety was Fortescue’s top priority during the transition to the new roster.
“Our people are Fortescue’s greatest strength and I’m confident they will step up through this challenging time. Our key focus during the transition to the new rosters is the safety, health and wellbeing of our people and we will be consulting with everyone affected during the process,” he said.
The company anticipates that the new roster will be in place by 30 June, 2015.