Australia's BlueScope Steel Ltd said it will cut 500 jobs at a steel making plant near Sydney as part of a union-backed plan to keep the facility open in the face of plummeting commodity prices.

In a statement, BlueScope said the Australian Workers Union (AWU) agreed to cut 300 manufacturing jobs and 200 support jobs to save A$200 million ($144 million) at the Port Kembla steelworks, one the biggest employers in Australia's 10th-largest city Wollongong.

For months, BlueScope, the AWU and the country's industrial relations tribunal have been negotiating a way to keep the facility operating as a Chinese construction slowdown hammers the prices of steel and steel-making ingredient iron ore, two key exports for Australia.

"We still have a lot of work to do in the coming weeks, as steel prices remain under pressure from the global steel glut," BlueScope Chief Executive Officer Paul O'Malley said in the statement.

The Port Kembla steelworks currently employs about 3,500 people. The remaining workers at the site also agreed to a three-year wage freeze, O'Malley said.

The AWU said steel workers had accepted "real pain and sacrifice" to keep the industry viable and demanded the government of New South Wales state introduce a policy of buying only locally-made steel.

Shares of BlueScope, spun off from mining giant BHP Billiton Ltd in 2002, rose 1.8 percent while the broader market was up 0.9 percent in early trading.

 

reuters.com

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