UPDATE 1-BHP to cut iron ore jobs as mining slowdown bites

* Iron ore job losses follow project cuts, coal mineclosures

* Australian growth at risk with mining slowdown * IMF cuts China growth forecast to 7.8 pct for 2012

(Adds analyst comment, broader economic concern)

By Sonali Paul MELBOURNE, Oct 9 (Reuters) - Top global miner BHP Billiton

said it plans to shed an undisclosed number of jobs iniron ore, its most profitable business, as it battles weakerdemand and higher costs, adding to mining job losses inAustralia.

The cuts in iron ore, following the closure of two of BHP'scoal mines, will stoke worries about weakness in the Australianeconomy, which has been underpinned by booming demand for ironore and coal, now slowing due to cooling growth in China.

"What you've got to expect across the broader mining sectorat the moment is that they're all going to be cutting jobs,"said Glyn Lawcock, an analyst at UBS. "Clearly in the last fewyears what you've seen in the mining industry is excess."

Global miners Rio Tinto and Xstratahave both announced job cuts at their Australian operations overthe past month.

Concerns about weaker growth led the Reserve Bank ofAustralia to cut interest rates by 25 basis points in a surprisemove last week following a dip in jobs, its third cut this year.

It could move again next month if the jobs report forSeptember, due on Thursday, fails to show a small rise inemployment.


Australia's success story takes chilling turn

Australia jobs by professionMore on Australia's fading resource boom<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Job losses in BHP's iron ore arm, the business that made upmore than half the group's earnings last year, reflect weakerChinese steel growth, which led BHP to shelve a $20 billionexpansion at its Port Hedland iron ore port in August.

The International Monetary Fund reinforced the bearish viewon China on Tuesday, cutting its forecast for Chinese growththis year to 7.8 percent from 8 percent.

Weaker demand from China has already hit BHP's coalbusiness, forcing it to close two mines where it had nearly 800workers. It has said it aimed to redeploy most of those workersto other mines.


Iron ore producers have been hammered by a 42 percent dropin prices from this year's high to a three-year low of $87 lastmonth. Prices have since rebounded to $110, but remain belowwhat had been seen as a floor price at $120.

BHP said on Tuesday it had reviewed the iron ore divisionand was letting employees know about a reorganisation plan,which would result in some job cuts.

"BHP Billiton Iron Ore's belief in the longer termattractiveness of the iron ore market remains unchanged," thecompany said in an emailed statement.

"However we have spoken for some time about the challengesfacing the resources industry, and we are not immune from thecurrent global conditions."

BHP employs just under 6,000 people in its iron ore unit,out of more than 46,000 in the company worldwide excludingcontractors, but declined to say how many jobs would be cut.

The Age newspaper said it believed about 200 jobs would go.

Most of the people whose positions were being eliminatedwould be offered opportunities elsewhere in the business orelswhere in the company, a spokesman said.

"There are currently approximately 900 open roles availableacross the iron ore business but until the redeployment processhas been completed, it is too early to say how many people willbe made redundant," BHP said.

(Editing by Richard Pullin)

((Sonali.Paul@thomsonreuters.com)(+61 3 9286 1419)(ReutersMessaging: sonali.paul.thomsonreuters.com@reuters.net))