Queensland's mining sector has axed more than 1,000 jobs in a week, with Rio Tinto becoming the latest victim of the global downturn.
Mining giant Rio Tinto has blamed a sharp drop in alumina prices for a decision to axe 705 jobs from its Queensland operations.
Rio Tinto said on Tuesday it would slow construction of the Yarwun alumina refinery expansion in Gladstone and reduce bauxite production at its Weipa mine to 15 million tonnes annually, down 22.7 per cent from 19.4 million in 2008.
About 500 of the job cuts will be in addition to planned reduction of 14,000 from Rio Tinto's global workforce announced last year.
The mining giant's share price dropped sharply and closed down 10.02 per cent, or $5.92, at 453.18.
Rio Tinto's head of Alcan bauxite and alumina Steve Hodgson said a depressed market due to the global economic crisis and downturn meant "tough decisions" were necessary.
"Even with alumina industry capacity cuts equivalent to 21 million tonnes per year since the beginning of the crisis, including cuts of 12 million tonnes made since January, there is still little improvement in the alumina price," he said.
At current prices, around 70 per cent of the industry is operating at a financial loss, Mr Hodgson said.
The Australian Workers Union (AWU) accused the company of "incompetence and ineptitude" in its decision and said it should have been consulted.
In the past six months aluminium prices have fallen from about $US1 per pound to around 65 US cents per pound, after rebounding from a recent low of 56 US cents per pound.
Under the cuts, 100 permanent roles at Weipa in Cape York will go, as will 570 contractor roles at Yarwun in Gladstone and about 35 permanent roles at the Yarwun refinery and at Boyne Smelters.
Fat Prophets analyst Gavin Wendt said the job cuts were not unexpected.
"It has all been tied in with doom and gloom in China, and lower demand for alumina and aluminium products," Mr Wendt said.
"Perhaps it is a surprise that they haven't taken the medicine earlier, that they have left it this late."
Mr Wendt said Rio Tinto would be regretting purchasing aluminium producer Alcan in a $US42 billion ($A59.2 billion) deal in November 2007, a move that left the company saddled with debt.
"Aluminium prices have been amongst the worst commodity performers over the last 12 months, along with nickel," Mr Wendt said.
The job cuts announced by Rio Tinto are just the latest in the resources sector in Australia.
Mineral sands miner Iluka Resources on Tuesday said it would shed 135 jobs in Western Australia due to weak demand, while BHP Billiton said earlier this year it would cut its global workforce by six per cent.
"I think there would be at least 10,000 job cuts in the Australian (resources) sector since the downturn started," Mr Wendt said.
"This is just a continuation of that. We have probably seen most of the cuts already I would suggest," he said.
Queensland Treasurer Andrew Fraser said the cuts showed the global crisis was "hitting Queensland hard".
"While the news today of further job losses is disappointing, it's not unexpected given the state of the aluminium industry," Mr Fraser told AAP.
He said a rapid response team had been activated to help the Gladstone workers find alternative jobs.