News

UPDATE: Workers axed as price plummets to 25-year low

What we know

  • QAL management have met with workers and made a number of redundancies, although they're not saying how many - publicly, or internally.
  • Since November the company has had a recruitment freeze, and has also significantly reduced the number of contractors it uses
  • The price of alumina is at its lowest price in 25 years
  • Unions are warning more job cuts from other major industries are likely

UPDATE 1pm Wednesday:

More Gladstone jobs could go from other major industries following the announcement of job losses at QAL yesterday.

Management was tight-lipped about the number of redundancies at QAL, but unions have told The Observer that between 60-80 positions were axed and other sites could see similar cuts.

Click on a pin to see what managers at each site are saying:


In the site notice to employees yesterday (Tuesday), QAL general manager Mike Dunstan wrote: "These changes do not in any way reflect on the performance and contribution of these individuals. I want to sincerely thank all affected employees for their absolute commitment to QAL, and for passionately pursuing improvement in our business during these challenging times."

>> QAL JOB CUTS 'NOT A GOOD THING FOR GLADSTONE': LEADERS REACT

It went on: "I recognise that this is difficult news to hear and may lead to many people feeling uncertain about their own future. It is essential that we reach the optimal workforce to operate our business in a safe, stable and reliable condition in these challenging market conditions and we would like to achieve this through natural attrition and potential redeployment of roles across site to meet our work needs."
 

 

Industry.
Industry. Paul Braven

 

"However after exhausting all other reasonable options, we have commenced an organisational review. As part of this review, this morning a number of our colleagues in staff support roles were notified that their positions will be made redundant. This decision has not been easy to make, but unfortunately is necessary in light of the continued cost pressure on our business. Our immediate priority is ensuring our people are treated fairly and with the respect and dignity they deserve."

The price of alumina is at its lowest in 25 years, now at about US$205 per tonne, down from a consistent average in recent years of US$330 per tonne.

Meanwhile, China has increased its production by 14.4% by the middle of November. China produced 11% of the world's aluminium in 2000. By 2015 that figure was close to 50%.

>> RELATED: THE INTERNATIONAL ISSUES HITTING QUEENSLAND JOBS 

This oversupply in the market has dropped the price by about US$100 per tonne.

And that's big impact for a company that was set up with the capacity to produce just under four million tonnes annually.

In the second half of 2015, alumina prices deteriorated significantly, dropping from around US$330/tonne to US$200/tonne
In the second half of 2015, alumina prices deteriorated significantly, dropping from around US$330/tonne to US$200/tonne

Markets reports show it's unlikely that China will cut back any time soon, meaning it is also highly unlikely there will be an imminent recovery in aluminium prices.

That has put enormous pressure on industry and meant a major transformation of the business here in Gladstone is necessary to ensure its survival.

>> RELATED: Alumina price to drop 18% in 2016

In early January, with the alumina price at US$199, QAL management met with employees and informed them that redundancies were on the table.

The major impact of that took effect yesterday, with an undisclosed number of people laid off, however the company has also had a recruitment freeze since November, and significantly cut back on the number of contractors on site in the past three months, too.

Management does appear to be optimistic about meeting economic targets this year, and aggressively adapting the business to survive long term.

A QAL worker said today they understood the company had little choice.

QAL February 2016.
QAL February 2016. Paul Braven

"Because of the alumina price dropping things are getting worse and worse," he said. "We don't know exactly how many but a few people got a letter (yesterday)."

Another employee said he was expecting there would be more redundancies, although the company hopes any future cuts will come through natural attrition.

This worker's crew wasn't affected by the redundancies but said he didn't know about his future. "I wish they would just tell everyone one way or the other," he said.

An insider, who himself expects to be involved with workers who were laid off, told the Observer that they too had not yet been told how many workers they might be dealing with.


>> You can follow the writer on Twitter, here

BREAKING

THE low international alumina price has forced the hand of Queensland Alumina Limited which today axed workers from its Parsons Point refinery.

The company wasn't saying how many people had been made redundant "out of respect for the workers" and for the process, but did say they were in 'support' roles.

"As a result of significant pressure on the aluminium industry we are working to reduce costs to make QAL more competitive," QAL general manager Mike Dunstan said.

"A number of employees have been notified that their positions will be made redundant. This is a difficult time for everyone associated with the business and our priority is assisting affected employees and their families."

The price of alumina is at its lowest price in 25 years, now at about US$205 per tonne, down from the consistent average in recent years of US$330 per tonne.

He is referring to the changes as a necessary "transformation" of the business.

Management said the changes would eventually make the refinery, that has been in Gladstone since 1967, a stronger business.

In December Rio Tinto, the owner of QAL, aluminium chief executive officer Alfredo Barrios said QAL and Rio Tinto Yarwun were losing money due to the low alumina prices.

He said the company planned to aggressively drive costs out of the business.

Since his statement the price of alumina has continued to drop and is expected to drop by 18% this year.

>> RELATED: THE INTERNATIONAL ISSUES HITTING QUEENSLAND JOBS 

Gladstone Industry Leadership Group CEO Patrick Hastings said the market conditions were at a historic low.

"Our members are doing everything they can to sustain their respective businesses," he said.

"QAL is a long term member of our community and we know they will do everything they can to support their employees.

"As a community, we need to band together, and not only support our industry, but also look to other opportunities to grow our local economy by creating new small and medium businesses".

Topics:  editors picks employment gladstone gladstoneindustry industry jobs qal



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