Huntly reels on news of job losses

17:00, Aug 29 2012
"BAD NEWS": Former miner Alan Foote.

The announcement of the axing of more than 120 jobs at Huntly East Coal Mine will have a huge impact on the miners, their families and the community, says union representative Ged O'Connell.

Yesterday's announcement by Solid Energy also means the remaining employees will be in a state of limbo while the state-owned company "parks" any long-term decisions about the mine.

The Engineering, Printing and Manufacturing Union has vowed to challenge the decision, which was widely feared to drastically impact on the Huntly community and wider economy.

Solid Energy announced yesterday that in response to a "very tough market" they were making a number of strategic and structural change proposals for the company, including axing dozens of Huntly jobs.

Solid Energy chief executive Don Elder said the decisions had been made to make Huntly East cost efficient in the short term, but with an eye to maintaining the "best long-term possibilities" for the mine.

Under the proposal, which would be confirmed late next month, Solid Energy would cease further capital investment in upgrading ventilation at Huntly East, which required large capital outlay for no short-term return.


This would see the mine's staff reduced by 63 from 234 positions to 171.

About 60 mainly contracting roles directly related to the mine's ventilation upgrade project would also be lost.

Under the "parking but preserving" option operations could continue at Huntly East for a year or more without any further major decisions being made.

Dr Elder said the renewal of Huntly East's contract to supply New Zealand Steel's Glenbrook Mill, where about 80 per cent of the mine's coal went currently, was still under negotiation.

The current five-year contract expires next June, but Dr Elder refused to put a deadline on a new contract being signed, nor to say whether a failure to sign a new contract would spell the end for Huntly East.

Overall Solid Energy's plans to restructure the organisation would result in about 140 redundancies - about 75 in coal operations, including Huntly East, and about 65 in other areas of the business including in the Christchurch-based ranks of management.

This number excluded Huntly East's contract workers, and it excluded the 240 staff and 130-odd contractors at Spring Creek in the South Island's West Coast, where Solid Energy yesterday suspended operations while they completed a review, one outcome of which could be completely closing the mine.

The Spring Creek miners were not required to work while the review - which had an indefinite timeline - was completed, but remained on full pay.

EPMU assistant national secretary Ged O'Connell said miners were meeting to plan their response to Solid Energy's proposal and to assess alternatives.

"This is a drastic decision that will have a huge impact not just on miners and their families but also the communities that rely on these jobs and the income they bring in."

He said the timing was particularly concerning as Solid Energy was currently on the block as part of the Government's asset sales programme.

"We need to be sure that these proposals are driven by genuine business reasons, and not simply to prepare the company for sale."

Waikato District Mayor Allan Sanson said he was surprised by the number of redundancies in Huntly, but was thankful for the 171 jobs which would remain.

"I thought Huntly would be reasonably insulated but it wasn't as much as I thought it would be.

"The open-cast operation is alright, it's the underground operation which is more expensive.

"I think it will have a real impact on the people of Huntly and their families."

Labour Leader David Shearer described the cuts as "an absolute disgrace".

“What we're seeing today is the real impact of National's failed economic policies which hinge on asset sales and mining.

"With Solid Energy's announcement, we can see that mining our way to prosperity isn't the answer," Mr Shearer said.

"This Government ... pledged to create 170,000 more jobs and to lift people's incomes.

"But what we're seeing instead are job cuts across the board and more families being left without a pay cheque."


The clang of beer jugs drowned out any talk of layoffs as Huntly's miners came to terms with news that their jobs aren't safe.

At the Huntly RSA, a miner sat drowning his troubles with a swappa bottle of Waikato Draught in the early evening.

He wouldn't give his name or age for fear of being first on the cutting block. "I'm the unknown soldier," he said, grinning.

He has worked in Huntly's mines since 1987, and in the industry since 1974.

He didn't bother sticking around after yesterday's meeting where it was announced that 63 of his colleagues, and friends, will be out of work. Instead, he hightailed it to the pub.

Surrounded by his mates - older men with rough hands and cigarette stains on their fingers - the miner tried to distract himself. He laughed and joked and drank.

"I don't want to be worried," he said. "It's not going to help anything being worried."

He knows he could lose his job, but he's lived through layoffs before.

He was more concerned for the young guys - the ones with kids, mortgages, futures.


Hundreds of West Coast mining staff will also wake up today with their futures hanging in the balance.

The region, which is still recovering from the 2010 Pike River mining disaster, has been hit by another major blow after Solid Energy suspended its work at Spring Creek Mine.

Its shocked staff attended an hour-long meeting yesterday in nearby Dunollie for the announcement by managers that work at the underground coalmine would cease until the state-owned enterprise had reviewed its future viability.

Staff were also given a letter stating operations at the underground coalmine were suspended immediately "until further notice" because of extremely challenging market circumstances.

The combination of slumping overseas coal prices and the high New Zealand dollar were blamed.

Outside the meeting, stony-faced workers said they were told the mine would be closed until next Monday and they would be contacted in the next two days about whether they still had a job.

They were on paid leave in the meantime.

Solid Energy also planned to talk to contractors this week, they said.

One option was to put the mine on "care and maintenance", effectively mothballing all development. A skeleton staff would continue at the mine to maintain it.

"There's going to be a lot more people going to Aussie I'd say," said a miner, who declined to be named.

Others echoed his sentiments, saying they would leave New Zealand because of the uncertainty.

Another miner, who also declined to be named, said workers needed to know as soon as possible whether their jobs were safe.

"It's keeping a lot of people in limbo. There's a lot of stressed people right now."

Rob Quigley, who had worked in extraction at the mine for several years, said the company should have been more proactive when it realised six months ago that coal prices were slipping, gradually reducing work rather a sudden closure.

"I've got a family and mortgage to pay for."

Another miner, who also declined to be named, said most workers were stunned.

They had been confident it would stay open because of the amount of money invested into Spring Creek's development by Solid Energy.

"I feel sorry for the guys who have only just started a few weeks ago."

West Coast-Tasman MP Damien O'Connor blamed the news on the company's "erratic management and direction" in the 1990s when the then-National Government wanted to sell it.

"We are again suffering the same plight. The National Government wants to sell off Solid Energy, the board and management want to slash costs and it's the West Coast workers - not those sitting in head office - and their families who suffer the consequences.

"Any good company, mining or otherwise, would have a more measured and longer term view of both job and company prospects."

Waikato Times