Rio Tinto starts off downsizing at its Utah mine

Mining giant Rio Tinto (ASX, LON: RIO) has cut nearly 100 jobs at its Kennecott Utah copper mine and warned further positions will be slashed later this month to lower operating costs after a pit-wall collapse inside Bingham Canyon in April.

The company said in a statement it continues to take steps to reduce the impact on its workforce and doesn’t yet have a figure for the total number of employees who will be affected.

“In order to make our business financially sustainable moving forward, we have to look at all costs, and unfortunately that also means people costs. The actions that we are taking today are a direct result of the slide on April 10,” Kennecott spokesman, Kyle Bennett, said.

He said the layoffs were permanent and that those affected can choose between using vacation time, taking unpaid leave or retiring, the last with a one-time $20,000 resignation incentive.

Kennecott, which estimates 2013 production will drop by half, is delivering ore from parts of the mine not impacted by the slide and is sending stockpiled low-grade ore through the refinery process, he said.

“There is some fluctuation, but we are around the 50 percent mark we had estimated,” Bennett added.

Last month’s landslide at Rio Tinto’s Kennecott Utah Copper unit, located in the Bingham Canyon operation, in southwest Salt Lake County, is already being considered by some experts as North America’s largest human-cause slide in history.

Image: Landslide at Kennecott Utah Copper’s Bingham Canyon Mine from archives.