Global miner Rio Tinto is cutting staff in Australia and closing its Sydney office as it battles falling commodity prices and threats to demand from Europe's debt crisis.

Some 30 support and services staff in Sydney and an undisclosed number of employees at the company's much larger operations in Melbourne would be cut, said Rio Tinto's Australian manager David Peever.

"We are undertaking a review of our support and services functions. There will be a reduction in the size of our Melbourne office and, yes, we do intend to close our Sydney office as well," Peever said from Paris.

"It's just making sure we are building in resilience in our business to deal with what is essentially a difficult time. We are seeing downturns in commodity prices, European circumstances are hovering over us, and we need to make sure we are very measured in terms of our approach to cost control," he said.

Rio's Melbourne CBD office employs about 240 staff while another 200 work from the suburb of Bundoora. Most of the downsizing would occur in the Melbourne city office, Peever said.

Rio is the latest firm to target coal mining jobs as Australia's miners face a squeeze from rising wages, equipment and fuel bills, new taxes, growing coal exports from the United States, and softer demand in China.

Last month, Rio said it was cutting an unspecified number of jobs at its Clermont coal mine in Australia as it battles sliding thermal coal prices.

"I'm not aware of new ones (miner job cuts) since then," Peever said.

Benchmark international iron ore prices hit their lowest level in more than 2-1/2 years on Friday as China's slowing economy reduced global demand growth.

Brazil's Vale, BHP Billiton and Rio Tinto are all targeting growth in Chinese demand with rapid capacity expansion plans.

Vale, the world's biggest iron ore producer, posted its worst earnings results in two years on Thursday.

Iron ore prices are around US$50 ($62) to US$60 per tonne cheaper than the same period last year and analysts have said the situation could worsen.

- Reuters