* Mining firms hunting for savings at all levels of business
* Have been hit hard by plunging commodity prices
* Worker perks seen in boom years are disappearing
* Miners face 'cost-grind environment' -analyst
By James Regan
SYDNEY, April 21 (Reuters) - From trimming menus in staff
canteens to cutting back on soap and washing detergent at worker
camps, the global mining industry that once lavished perks on
employees is scrimping like never before as a brutal downturn
engulfs minerals markets.
After frantically cutting costs by slashing jobs, freezing
salaries and squeezing more from suppliers, mining companies are
now scrambling to unearth savings in even the most mundane parts
of their businesses.
"It's not to the point yet where employees are being asked
to grow their own vegetables or stay in farmhouses, but if
you're not seen attacking costs at any level, no matter how
small, it's not a good look," said Kevin Kartun, a geologist and
principal of Karmar Mining Services in Sydney.
In the boom years, Australian mining companies typically
laid on daily barbecues for 'fly-in fly-out' workers in remote
locations, as well offering luxury comforts and entertainment
such as jetting in rock bands to play gigs.
But, with prices for everything from coal to copper
decimated in recent years as China's economy slows, such
lavishness has disappeared.
"Living arrangements today are so different from the go-go
days, when companies would do anything to keep you," said an
iron ore miner, who declined to be identified due to the
sensitivity of the issue.
"These days I might have a beer after my shift and call it a
night."
Perks such as free extra soap and laundry detergent are
being scrubbed out, while menu options in canteens are being
narrowed to reduce waste, according to Rachel Tan, marketing
manager for Morris Corporation, which manages remote mine sites
in Australia.
"Our clients are telling us that cost cutting is very much a
priority, every step of the way," she said.
Meanwhile, global mining giant BHP Billiton BLT.L has
ditched free water bottle dispensing machines at its office
tower in Perth in what it described as a "huge cost saving".
And fitness aficionados at one Rio Tinto RIO.L iron ore
mine scoured old mining camps for used exercise equipment to
build their gym. That saved the company $22,000, according to
Michael Gollschewski, managing director of Rio's Pilbara Mines
division.
Elsewhere, Agnico-Eagle's AEM.TO Meadowbank gold mine in
Canada's remote Arctic, which produces its own power from
burning diesel, has developed a system to use waste heat
generated in the process to warm miners' sleeping quarters and
water for showers.
GRINDING COSTS
On their own, each of these measures are unlikely to do much
to help mining firms. Rio posted $866 million in losses in 2015,
Glencore GLEN.L lost almost $5 billion and Anglo American
AAL.L ended the year $5.6 billion in the red.
But the hope is that collectively they will have an impact.
Plus, with paper-thin margins, it doesn't hurt to show
shareholders a frugal side.
"These small things may not be significant on their own,"
said Peter O'Connor," an analyst at investment firm Shaw &
Partners in Sydney.
"But miners now exist in a cost-grind environment and need
to be very judicious with every dollar - to continually do more
and more with less and less - and that's what we're seeing."
And employees, of course, have plenty of incentive to join
in austerity drives, hoping to hang on to their jobs even as
thousands disappear across the sector.
Fortescue Metals Group's FMG.AX iron ore mines are among
those offering suggestion boxes for employee ideas on cost
savings.
One idea out of some 4,000 submitted under a programme
dubbed 'Have a crack' - replacing disposable plastic snack boxes
with reusable ones - has saved around $100,000 so far, according
to Chief Executive Nev Power.
"All and everything will be considered," Power said.