Roa Mine - the last underground coalmine on the West Coast - announced today it was "suspending" operations, leaving 20 miners with an uncertain future.
Miners were called to a staff meeting at 7am to be told the news. Only the small open-cast mining will continue.
Grey District Mayor Tony Kokshoorn said it was "the end of an era" after 150 years of continuous underground mining on the West Coast.
The suspension of operations follows the loss of 600 mining jobs in the Greymouth area alone in the past five years, with the closure of the Pike River and Spring Creek underground mines.
Roa Mining chief executive Brent Francis said today the decision was a result of the tough market conditions for international coal prices and the costs associated with further development, which the company was not prepared to invest in.
"The decision to suspend our underground operations at our new Rajah operation is regrettable but under the current economics, necessary," Mr Francis said.
"We have completed the necessary development to commence hydro mining, which requires a further capital injection which at this time is not viable."
He hoped the decision to suspend underground mining "can be reversed with time and some favourable market conditions".
The open-cast operations, employing seven contractors, would continue to meet the existing supply contracts the company had, as they had done for the past year.
Just two weeks ago Mr Francis publicly refuted rumours the mine was about to close, saying it had signed contracts to deliver coal for the next 10 years, despite rock bottom coal prices that have closed mines all around the world.
Mr Francis said today his comments then needed to be seen in light of Roa being a series of operations.
In terms of further development of the underground operation with hydro mining, "we've gone as far as we can go" in the current trading conditions.
"The plan is still there but until the prices improve, the next stage of the development we just can't spend that next lump of capital. On current and latest forecasting it's unlikely we'll do anything in the next 12 months. The coal prices look to be locked into those lower numbers for the next 12 months."
The decision to suspend operations now was "to be fair" to the workers and the company could not keep them on a string. It was possible some workers would be offered other positions on the site, Mr Francis said.
"We've got a week of consultation and understanding what may and may not be possible in other parts of the operation."
The Greymouth Star understands staff have been stood down on full pay for a month, but that no redundancy will be paid.
Roa produces about 150,000 tonnes of coal annually, mainly for export for use as foundry coke.
Mayor Kokshoorn was stunned to hear the news.
"I can't believe this: that's all we need. It's the end of the coal era for the Grey district - up until today there were 40 jobs in coalmining in the district," he said.
"It is a blow. Most people thought that Roa was going to be able to weather the storm."
Mr Kokshoorn estimated at least a further 10 support jobs would go on top of the job losses at the coal face.
"I feel sorry for the workers, who have been loyal to the company, but I also know that Roa was a company that was well run and it would be a tough decision for them to make. It's a sad day."
The union representing some of the workers at the site, E Tu, was tight-lipped when asked for comment this morning.
West Coast organiser Garth Elliot said the union was in talks with the company about the suspension, which he said was not a closure.
"We've got to get all our ducks in a row on this," Mr Elliot said.
"He's certainly not closing the mine ... it's early days yet."
Mr Elliot said the future of any jobs at the site was "at a proposal stage" with more clarity likely in about a week.
He acknowledged the state of coalmining on the West Coast was now "pretty low".
"It's not looking any better at this stage and certainly doesn't look like getting any better before the end of the year."
It was possible things might pick up but it would require a crystal ball to be certain, Mr Elliot said.
"All the predictions are at this stage that prices will not start coming right until the end of this year or the beginning of the next."
However, the suspension of underground operations at Roa effectively ends 150 years of underground mining on the West Coast, and follows the closure of the Terrace Mine at Reefton a year ago.
Mr Kokshoorn said the "only silver lining" in the latest blow to coalmining was that the district had already been dealing with the loss of 600 jobs since Pike River.
"It's not like the kick we got from Spring Creek, even though it's bad. It's something we can absorb and keep pushing forward. We've made this painful transition now from extractive industries to sustainable.
"I'm optimistic for our future here still. I feel we're bottoming out now with job losses here on the West Coast."
By Brendon McMahon of the Greymouth Star
