Rio Tinto is cutting more jobs from its iron ore division in Western Australia.

Reports say 500 jobs (4 per cent of Rio’s workforce) will go, though the company has not confirmed any figures yet.  

Jobs at head office in Perth are set to be targeted first.

“The market outlook remains challenging and we currently have 1,000 initiatives underway across our business to reduce costs, improve productivity and ensure we remain internationally competitive,” Rio said in a one-line statement to the media.

The iron ore price was up near $US80 a tonne last Friday, but has since fallen closer to $US70.

Some have suggested the latest cuts are in response to West Australian Nationals leader Brendon Grylls’ plan to impose a $5-per-tonne iron ore tax.

The tax has been slammed by Rio Tinto, BHP Billiton, and industry lobbies, who claim it is unfair and would cost jobs.

Mr Grylls is not giving up the tax plan, and has criticised Rio for cutting its workforce while its margins increase.

“There just seems to be now a massive disconnect between what the London boardroom of Rio Tinto's doing and what's happening on the ground locally,” he said.

“Any other business that had tripled its clear margin in the last six months would probably not be looking to lay off workers.

“The fact that in this debate that's happening at the moment, that Rio would lead into this debate that [there's] potentially 500 jobs at risk, and not seek to correct the record today, means that the London head office's of Rio has no weather eye on what's happening here in Western Australia,” he said.

WA Premier Colin Barnett says iron ore miners will lose public support if they do not preserve jobs and retain their workforce when prices are good.

“Only two years ago they were all saying they didn't have enough workers. The world hasn't changed that much,” he said.

“But I think what the mining industry needs to be very careful about, is they could lose public support overall.”

Australian Manufacturing Workers Union state secretary Steve McCartney agreed that Rio was not cutting jobs in response to Mr Grylls' tax plans.

He described the new fee as a “thought bubble mining tax that hasn't even happened yet”.

“Whilst those comments time nicely with the TV advertising campaign they're running against Grylls' proposal, we should be talking about a real commitment and plan to create and save full-time jobs for Western Australians,” McCartney said.

“These cuts are just part of Rio's bigger long-term plan to casualise their iron ore workforce.”