Nearly 5000 Australians employed in the mining industry have lost their jobs as growth in the previously booming resources sector grinds to a halt and up to $40 billion worth of new projects are put on the back burner.

Last week alone, 734 employees signed off and contractors are warning more cuts are expected as production is wound back.

Mining giant Rio Tinto put 630 workers at the Northparkes copper mine in NSW on notice and troubled miner OZ Minerals sliced 189 jobs by completely shutting down its Avebury nickel mine in Tasmania.

Earlier in the week OZ Minerals shed 135 jobs at its Century zinc mine in Queensland.

Since June an estimated 4400 mining jobs have been lost — more than half of those in Western Australia — as base metal prices plunged, credit dried up and Chinese steel mills drastically cut production.

Rio has told the workers at its Northparkes copper mine their jobs could be terminated next month, providing the first hints that its program to cull 14,000 jobs around the world will hit the nation hard.

If Rio stops its plans at Northparkes, the number will climb past 5000, but even if it doesn’t, other pull-backs are certain to keep the tally rising.

Even without adding in Rio’s flagged cuts, NSW has been second-hardest hit, with 909 jobs going, largely from lead and zinc mines near Broken Hill and Cobar as Perilya and CBH Resources streamlined operations.

Until this week, Queensland’s mining industry had been insulated from the turmoil, but that changed when Xstrata Coal and Macarthur slashed a combined 410 jobs from Bowen Basin mines in Queensland and OZ announced its cuts at Century, north of Mt Isa.

The cuts add to those at the Lady Annie copper mine in November to bring Queensland’s job losses to 660 so far.

Rio said a 60 per cent drop in copper prices and plans to reduce capital and operating spending around the world meant it could stop work on open-pit and underground work at Northparkes, a mine which Rio is trying to sell.

The 580 workers will learn their fate on January 15, Rio said earlier this week in a narrowly distributed media release. The notice is the first sign of the wave of 14,000 job cuts Rio plans to unleash on its global operations in the first quarter.

With the cuts flagged from all operations, a big chunk of the job losses are also expected to come from Rio’s WA iron ore operations and east coast bauxite, alumina and coal operations.

While Northparkes has told staff and contractors they will know in January whether they are needed, a Rio Tinto spokesman said this would not be the date the global job cuts and capital expenditure results would be announced.

Jobs at Rio’s $1.5 billion Argyle diamond mine expansion also came under the spotlight yesterday, after mining contractor Macmahon Holdings said it understood its $60-70 million a year underground mine contract there was being reviewed.

Another WA mining contractor, VDM Group, said Rio had reduced the scope of its work at Argyle. A Rio spokesman in Perth said all expansions were under review.

Macmahon chief executive Nick Bowen yesterday indicated more production cuts were on the way. “We are starting to see signs of clients pulling back on proposed projects and their expansion plans, and that’s all changed quite quickly, in the last one or two months,” he said after the company reduced its profit guidance.

“Where we are being told of potential reduction is some of the base metals and other areas (but not in iron ore and coal yet).”

He said some clients had indicated they would defer or cancel underground nickel contracts.

Contractors are being hard hit among the job losses and while most said they would try to redeploy workers, cancellation of planned projects makes this unlikely.

Credit Suisse estimates that $US193 billion of projects around the world will be delayed — $US25.2 billion of that in Australia — and that it could take years for this to be looked at again.

Xstrata Copper, which runs the former MIM Holdings mines at Mt Isa, also hinted at cutbacks yesterday. While not commenting on whether it would reduce staff, a spokesperson said the company was trying to reduce capital spending and operating costs.

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