Plunging global coal prices have forced Solid Energy to
further slash its workforce by almost 200 jobs at its West
Coast open pit Stockton mine, the country's largest coal
From a company with a multibillion-dollar value and almost
2000 staff in 2012, Solid Energy has booked losses including
asset writedowns of more than $400 million over two years,
and now has 730 staff around the country.
From Stockton's total workforce of 521, 102 mine staff and 35
management and administration jobs will go, plus a further 50
of the 120 jobs of contractors servicing the mine. Annual
production will drop from 1.9 million tonnes to 1.4 million.
Solid Energy chief executive Dan Clifford said the job losses
were in response to the depressed export market, which was
expected to remain in place ''for quite some time''.
''On current pricing projections, we have to minimise our
losses by reducing costs so that we can keep the mine
operating,'' he said yesterday in a statement.
West Coast mining communities have been hit hard in recent
years, with the Pike River disaster in 2010 and more than 300
Coast Solid Energy redundancies. An opportunity for up to 400
jobs is unrealised, with the low prices postponing developer
Bathurst Resources from starting its coal mine.
Labour rounded on the Government yesterday, saying the job
losses reflected National's ''disastrous management'' of
Solid Energy's financial predicament, while NZ First labelled
it ''neglect of the regions''.
Once promoted in the stable of state owned enterprises (SOEs)
to be partially floated by the Government, high global coal
prices at the time had emboldened Solid Energy to spend
excessively on research and development options, prior to its
near collapse in 2012, before a dual bail-out by its banks
and the Government was undertaken in 2013.
China's demand for iron ore and the crucial ingredient of
hard coking coal had pushed prices to record levels in recent
years; up to $US350 in 2008.
China's recent declining demand has iron ore and coking coal
sitting at record lows, respectively yesterday at $US95 and
$US115 per tonne. Solid Energy management told Parliament's
finance and expenditure committee in early March its coking
coal output was sustainable - if prices were around
$US140-$US150 a tonne.
Labour's SOE spokesperson Clayton Cosgrove said with
yesterday's 137 job losses, ''the total number of job losses
from the Government's disastrous management of Solid Energy
is close to 900''.
''With much of its workforce gone, Stockton will end up
operating under capacity, along with Spring Creek, which has
been mothballed. National has campaigned on promoting mining
in New Zealand but ironically it's shutting them down
instead,'' he said.
Mr Peters said that, had a 25% royalty return been in place
during 2013-14, more than $80 million would have gone towards
regional development, helping create new enterprises and new
''It has been a one-way street as the regions produce our
exports, in particular from dairying, forestry and mining,
and the Government reaps the rewards,'' Mr Peters said.
The Engineering, Printing and Manufacturing Union,
representing 300 Stockton workers, also pointed to what it
called ''serious mismanagement'', by Solid Energy's previous
board and the Government.
EPMU organiser Garth Elliott said Solid Energy had ''no
ability to weather the current conditions'', because the
Government had allowed it ''to rack up debt and overvalue
itself in the hope they could flog it off as part of the
asset sales programme''.
''They made decisions on the basis of short-sighted greed,
and the miners are paying the price for it today,'' Mr