Solid Energy cuts staff

The West Coast mining industry has been dealt a heavy blow today, with 113 jobs to go at Solid Energy's Stockton mine.

The company is cutting 151 jobs, but some of the losses will be made up of unfilled vacancies, meaning 113 current staff will lose their jobs.

This cuts the number of staff at the mine from 397 to 246.

It follows Solid's decision to cut 185 jobs a year ago.

The operation had been losing $2.1 million per month in this past financial year.

Prime Minister John Key said everything was done to try and avoid job losses at Solid Energy.

"Unfortunately Solid Energy is in a position that pretty much every coal company finds themselves in at the moment.

"It's one of the reasons you've seen the Australian economy so badly affected."

Chief executive Dan Clifford says the changes are needed to stem Stockton's losses that average $2.1 million a month - and are set to worsen.

Mr Clifford said staff will have time to consider and provide feedback to today's proposal.

The company will then undertake a process to select employees for the remaining mining jobs.

Coal Action Network Aotearoa is calling for the Government to help 113 workers who will lose their jobs.

CANA spokesperson Jeanette Fitzsimons said banking on the coal industry to provide an economic future for the West Coast was a "risky strategy".

It was up to the Government to led a community-wide discussion about the West Coast's future, she said.

"Solid Energy is a stranded asset - even its chair has resigned because she doesn't think the company has a future. Yet the Government continues to push coal and other fossil fuels as a future for New Zealand," she said.

Coal prices were forecast to remain at record lows for the foreseeable future and investors were dumping coal worldwide, she said.

CANA released an update on its Jobs After Coal report on Saturday which showed 111 coal industry jobs had been lost since March.

That number was now at 224 with today's announcement, Ms Fitzsimons said.

The government helped bail out Solid Energy in 2013 with $130 million of preference shares and a funding line for operations in a deal that saw taxpayers treated as secured creditors and forced banks lending to Solid Energy to take a $75 million collective writedown and become unsecured creditors of a company that lost $517 million in the previous two years after global coal prices fell dramatically.

Ongoing poor trading conditions saw Solid Energy announce on Feb. 27 it risked breaching its banking covenants in 2016, based on current forecasts of coal prices and commercial performance, and a need to engage again with its bankers on a restructuring, just three days after the sudden departure of chair Pip Dunphy.

Emails released later showed she did not believe Solid Energy could be made viable, while Finance Minister Bill English remained optimistic.

Among the responses considered were "selling assets, liquidation, or trading though," the company said in a statement today.

Solid Energy said it had no immediate difficulties in meeting its commitments, and is holding talks with its shareholder and major lenders over the proposal.


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