The new initiatives will come alongside a reduction in exploration spending and consultancy savings, and the company said it expected to save $A3.5 million a year with the new measures.

A dividend payment scheduled for the end of February has also been postponed.

"We have seen a sharp drop in the iron ore price in recent months, coupled with a downturn in market conditions for the mining sector as a whole," Cape Lambert executive chairman Tony Sage said.

"With these factors in mind, Cape Lambert believes it is prudent capital management to find genuine cost savings across its business and postpone the second dividend payment.

"I would like to emphasise that this is a postponement, not a cancellation of the dividend payment."

It's not clear which assets will be placed under care and maintenance under the new measures and a Cape Lambert spokesperson did not reply before deadline this morning.

The cuts come on the back of a review of the company's capital management strategy and projected expenditure.

Cape Lambert said recent deteriorating market conditions and a substantial drop in the iron ore price had created uncertainty in the iron ore sector.

It said it would map out a new timeline for the rescheduled dividend payment further down the line.

"Cape Lambert as a company is in a strong commercial position and taking these measures is sound management to protect the company in what is a hard time for the mining sector," Sage said.

"However, Cape Lambert is confident that the iron ore price will recover in the near-to-medium term and the dividend payment can resume in due course."

Cape Lambert finished the September quarter with $58.1 million cash at bank and no debt.

For the December quarter it forecast a $3.5 million spend on exploration and evaluation and a $1.5 million outflow for administration.

The company's shares were down 14.3% to 7.7c this morning, and have had a significant tumble in the past six months after climbing to 16c in August last year.