By 3 News online staff
Struggling state-owned enterprise Solid Energy has announced major job cuts and suspended operations at its Spring Creek Mine on the West Coast.
Around 230 workers are employed by the mine.
Solid Energy also announced 63 jobs will go at Huntly Mine in the Waikato, and 60 "mainly contracting roles" will go at the mine’s ventilation upgrade project.
The company issued a statement this afternoon and says the restructuring was in response to “extremely challenging” market conditions.
“The changes are designed to absorb the impact of the global coal market downturn by introducing operating efficiencies to preserve and generate cash, while retaining core capability and future options for growth,” Solid Energy said in the statement.
Solid Energy posted a $200 million loss in the last financial year, and falling coal prices have forced a company-wide review.
Two weeks ago Solid Energy chief executive Don Elder revealed Spring Creek Mine has been losing more than $5 million a month and its operations were under review, leaving miners worried for their jobs and locals worried about what that would mean for their town.
Grey District Mayor Tony Kokshoorn says it could be a big problem for the area.
“Miners are on large wages and when they lose a job here they will chase the high wages in Australia, because we can't match those wages in other industries.”
He says Solid Energy needs to value the coast's miners, because if coal prices rise they'll be needed again.
Mr Kokshoorn says the town's already lost too many workers. Most of Pike River's former employees went overseas when that mine shut after the tragic explosion in 2010.
“We lost 150 workers, most went to Australia and the same will happen again, it was only last week the Australian companies were advertising for miners here in our paper. So yes if they lose those miners, it will be extremely hard to get them back.”
The Engineering, Printing and Manufacturing Union, which represents employees at the mines, says it will fight the cuts.
“This is a drastic decision that will have a huge impact not just on miners and their families but also the communities that rely on these jobs and the income they bring in," says national secretary Ged O’Connell.
“Under this proposal anyone who wants to stay in underground mining would have little option but to move to Australia, and once they’re gone it’ll be very hard to get them back."
He says the EPMU's collective employment agreement, Solid Energy has to "engage in meaningful consultation with staff, and any union members made redundant will be entitled to notice and compensation".
“Our priority now is to get together with our members, look at Solid Energy’s business case and see whether there are any alternatives that don’t involve such drastic cuts,” says Mr O'Connell.
“We need to be sure that these proposals are driven by genuine business reasons, and not simply to prepare the company for sale.”
Solid Energy is one the state-owned assets the Government has indicated it is looking to partially sell.
Other changes announced today by Solid Energy include:
- Ceasing further capital investment in upgrading ventilation at Huntly East Mine in Waikato
- Optimising production and minimising costs at Stockton Mine to generate additional cash
- Selling or closing its biodiesel business, and confirming the Nature’s Flame wood pellet business’ status as a stand-alone operation
- Shifting the focus to move, more rapidly, to commercial underground coal gasification projects in Huntly and overseas, utilising funding from partners or syngas customers
- Shifting the focus of coal seam gas development to the company’s Taranaki holdings
- Reducing capital expenditure by approximately $100 million in the current 2013 financial year.
3 News