Bad news . . . Spring Creek miners congregate outside a
meeting yesterday at Dunollie, near Greymouth. Photo
Greymouth will bear the brunt of the job cuts announced
yesterday by Solid Energy as the coal producer mothballs Spring
Creek mine because of the unaffordability of maintaining its
Staff numbers will drop from about 254 to 32. After two
months of underground work at the mine, required to set it up
for care and maintenance, a staff of about 20 would maintain
the mine's infrastructure.
The decision would also affect the jobs of up to another 130
people employed by contractors - many of whom had been on the
site as part of the development project.
Solid Energy chief executive Don Elder told Spring Creek
staff the company had completed its review of the mine's
viability and concluded that it could not afford the ongoing
costs of the operation.
Solid Energy chairman Mark Ford said if the proposal went
ahead, the company would assist affected staff to find
employment and would retain capability in Greymouth to
explore opportunities. The company was in discussions with
the Stronger Christchurch Infrastructure Rebuild Team and
with mining workforce companies in Australia, he said.
An angry West Coast MP Damien O'Connor said news that more
than 200 Spring Creek miners would lose their jobs confirmed
that the "outrageous decision" was predetermined and made
"The miners, their families and the West Coast community were
told that the Spring Creek review was genuine. They managed
to find $60 million in savings when the management of Solid
Energy had failed 14 separate mine plans to keep the costs
Just last week, the Government said it was an "absolute
priority" to work with Solid Energy to make Spring Creek
financially successful, Mr O'Connor said. It had a moral and
ethical obligation to consider closely and carefully the
proposal from the miners and management that was only
finalised last Thursday.
The decision indicated that neither Solid Energy nor the
Government was genuinely concerned about job losses.
Mr O'Connor accused the Government and the company of tidying
Solid Energy up for listing on the stock exchange and
providing investment opportunities for those New Zealanders
who could afford to buy shares.
"This cynical restructure of the company ... will gut the
town of Greymouth and destroy the spirit of a community that
has relied on what it knows were empty promises from Solid
Energy and the Government." Mr Ford said the company
"absolutely understood" the potential impact of the proposal
on the local Greymouth community and the wider district.
"We will do all we can to identify future employment
opportunities for affected staff and we have already had some
very promising discussions which we hope to confirm in the
Spring Creek mine had not been profitable for some time.
Since Spring Creek Mining Company was set up in 2007, it had
lost more than $100 million.
It had been in a development phase since the end of 2011,
with minimal coal production, and had cost the company $50
million during that time. Spring Creek would not have
returned to full production until early next year and to
reach that point, a further $40 million to $70 million would
have been needed, Mr Ford said.
"In recent years, the mine has performed below expectations
as a result of more complex geology being encountered, higher
costs and slower development progress. The mine has also
struggled to meet the company's and wider public expectations
about operating safely."
Options for the mine that were considered included different
mine plans and full closure, Mr Ford said.
The company believed the mine still had potential in a
stronger international market for steel-grade coal,
particularly as a blend-stock for some of Stockton's
production, or as a specialty product. Placing the mine into
care and maintenance would allow options for the future which
included waiting for the market to recover,reviewing future
options to restart the operation and selling or closing the
mine, he said.
Solid Energy's total workforce would reduce to about 1360
compared with 1800 at the start of the year.
Mr Ford announced that jobs would go throughout the
state-owned enterprise, including 163 corporate, support
services and development jobs, as well 67 jobs at Huntly
At a glance
• 440 jobs to go, most of them in Greymouth
• Spring Creek mine is mothballed
• Huntly East mine's production reduced
• Reducing capital expenditure by $100 million