Mining giant Rio Tinto has confirmed the company will slash more jobs across its iron ore division in Western Australia.
ABC News said while the miner was not yet confirming numbers it was understood 500 jobs, or 4 per cent of its West Australian workforce, were set to go.
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Rio Tinto set to lay off 500 workers
Rio Tinto has announced it will lay off 500 workers as the company prepares for a drop in iron ore prices. Vision: Nine News Perth.
Rio said "rolling reductions" were underway, with jobs at head office in Perth to be targeted first after releasing an online statement describing conditions in iron ore as "tough".
"The market outlook remains challenging and we currently have 1000 initiatives underway across our business to reduce costs, improve productivity and ensure we remain internationally competitive," it said.
The iron ore price hit almost $US80 a tonne on Friday, but has fallen to $US72 over the weekend.
Rio Tinto said its forecast is for the iron ore price to average $US40 to $US50 a tonne next year.
Rio Tinto cut 170 jobs from its Pilbara operations in March.
The news of further job cuts comes after WA Nationals leader Brendon Grylls proposed a controversial hike in the rental fee paid by BHP Billiton and Rio Tinto from 25 cents to $5 a tonne, arguing that the state's two biggest miners can afford to and should pay a fairer share into the public coffers.
At the time, the two big miners slammed the plan as "discriminatory" and "ill-conceived".
A report commissioned by the Minerals Council of Australia - which counts BHP and Rio as members - argued the proposed new tax on iron ore would lead to the loss of 2900 jobs in the Pilbara region, 3400 in WA in total and 7200 nationally.
The further job losses to the state come after Western Australia topped the nation's unemployment rate in October.
In its latest State by State report, CommSec rated WA's economy the "worst performing in the country" , saying the economic performance of WA was a reflection of the end of the mining and construction boom.
with ABC News, AAP
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