VOLATILE iron ore prices have forced Mount Gibson Iron to slash 270 jobs, sending the company's share price almost 20 per cent lower.
Most of the cuts, which include 140 contractors, will be made at the company's Koolan Island operation off Western Australia's north Kimberley coast.
The iron ore miner, which announced a review of its expenditure in August, said cost-saving initiatives would eliminate or defer between $120 million and $150 million in capital and operating expenditure.
In a bid to reduce non-essential or discretionary spending, the company also announced the board and senior executive management have agreed to a 10 per cent reduction in their total remuneration packages for the financial year.
Shares in the company were 11.5 cents, or 17.3 per cent, lower at 78 cents at 1453 AEDT.
Mount Gibson chief executive Jim Beyer said decisive "business optimisation measures" were necessary in light of current volatile market conditions.
"It is encouraging that iron ore prices have firmed in the past week or two, and we remain confident in the long-term outlook for iron supply to Asia.
"However, the immediate market outlook remains uncertain," Mr Beyer said.
Some of the already-planned redundancies associated with a mine closure at Tallering Peak in WA would be brought forward.
Mount Gibson has also suspended all discretionary capital expenditure, non-safety-related training and reduced the ongoing use of external consultants.
The Perth-based company has three main projects, including Tallering Peak, Koolan Island and Extension Hill.
Plans to ramp up production beyond the current three million tonnes per annum production rate at Koolan Island will be slowed.
Mining activity at Extension Hill, which was reduced from July, will continue at the currently reduced rate and a company-wide slowdown would involve mining on a single shift basis at all mines.
The company still continues to target sales of between eight million and 8.5 million tonnes for the financial year.
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