Almost 140 jobs are to be axed at Solid Energy's Stockton
mine, the company announced today.
Continuing low international coal prices was to blame for the
proposed job cuts, it said.
Revealing the proposal to staff, Solid Energy said 137 jobs
could go from the Stockton workforce of 521 - incorporating
35 management, technical, support and administration jobs and
102 mining jobs. A further 50 mining contractors' jobs are
also in line to be axed.
Production at the West Coast export mine would be reduced by
a quarter, from 1.9 million tonnes per annum, to 1.4 million
tonnes per annum, in the next financial year.
The proposed changes were a necessary response to the
depressed export market which was expected to remain for
quite some time, Solid Energy chief executive Dan Clifford
"On current pricing projections, we have to minimise our
losses by reducing costs so that we can keep the mine
"We feel for the staff and their families, and for the wider
Westport community, who will be affected by this, but by
reducing activity we believe we can keep the operation viable
with the continued benefits for the community."
If the proposals are implemented, the company would also stop
non-essential development work, mine from lower
cost-to-produce pits to meet long-term export customer
contracts and carry out most mining work during the day to
reduce the impact of weather on the operation, he said.
"While Solid Energy's domestic business has been stabilised,
the export business has continued to see falling prices from
the 2011 highs of US$330/tonne," Mr Clifford said.
"Even more recently the price has continued to decline with
the quarterly benchmark price for hard coking coal falling
from US$143/tonne for the January to March quarter, to
US$120/tonne for the current quarter while the spot price has
been sitting at about US$113/tonne for the last two months.
"While we are planning to continue with reduced production
and reduced staffing levels for the next two to three years,
we will still be able to meet our long-term customer
contracts while retaining our options to respond to changes
in the market."
A two week consultation period will begin with with Stockton
employees. It would be followed by a confirmation of the
structure and selection process for contested and vacant
roles, with the aim of implementing new rosters by the end of
July, Solid Energy said.
Mining union the EPMU labelled the plans "short-sighted
greed" stemming from serious mismanagement of the company by
its previous board and management.
"We didn't have to end up here," said Garth Elliott, EPMU
organiser for the Stockton miners.
"Everyone knows times are tough in coal mining, but the
company has no ability to weather the current conditions.
"That's because the government allowed Solid Energy 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."
The union would work with Solid Energy management to ensure
any redundancies were made as fairly as possible, he said.
EPMU members are entitled to redundancy pay under the terms
of their collective agreement.
New Zealand First leader Winston Peters said the West Coast
was reeling at the news of further job losses.
The National Government's "total neglect of the regions means
there is nothing to soften the blow", he said.
"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.
"The announcement today of 137 more jobs being lost at
Stockton mine follows hundreds of other job losses on the
West Coast, and in other regions ? the high dollar is
crippling many producers and exporters and lack of diversity
is hindering job creation."
Labour's state-owned enterprises spokesman, Clayton Cosgrove,
said the Government's "disastrous management" of Solid Energy
was to blame for the job losses.
"The loss of 137 jobs is yet another massive blow to the
people of the West Coast, alongside the more than 700 other
Solid Energy jobs lost," he said.
"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
State-Owned Enterprises Minister Tony Ryall was "responsible
for every one of these job losses", Mr Cosgrove said,
branding him "the most negligent and incompetent SOE Minister