Stockton mine job losses confirmed

NICOLE MATHEWSON, SARAH-JANE O'CONNOR, SIOBHAN DOWNES AND ALAN WOOD
Last updated 16:23 06/06/2014

PM on Stockton mine closure

Stockton mine redundancies

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West Coast miners expecting the worst were relieved after Solid Energy announced 137 staff and 50 contractors are likely to lose their jobs at Stockton mine.

The company told staff today that it planned to cut production at the Stockton opencast mine by a quarter over the next financial year in response to low international coal prices.

If the proposal was implemented, 137 people from Stockton's work force of 521 would be made redundant, comprising 35 management, technical, support and administration staff and 102 mining staff.

Ian James, a Nelson miner who has worked at the West Coast coalmine for four and a half years, said the announcement was positive.

"I went in there expecting the worst," he said. "There were some very nervous people going in there."

Alan Sinclair was worried about who would lose their jobs and said he "won't be able to pay the mortgage" if he was one of those to go.

But that news could be weeks away.

"No-one's been told anything about who stays and who goes yet," he said.

Andrew Campey said the job cuts were not as bad as he had feared.

Terry Kirker said the news was "better than I thought it was going to be".

"I was expecting more people to lose their jobs," he said.

Buller Mayor Garry Howard said people were "sighing a breath of relief" because the news was "not as bad as they anticipated".

"It will allow people to move forward and make commitments." He said staffing numbers were returning closer to what they had been a decade ago.

He thought coal would "still have a future", and it was positive that Solid Energy would not close the mine in the short term while international coal prices were low.

"We certainly didn't want to see that," he said.

"It is not a case of looking backwards but appreciating that coal is cyclic and will increase in value again."

Howard said in the "present climate" it was likely that people who lost their jobs in the restructuring would leave the district.

"We are going to lose families, we are going to lose skills," he said.

The restructuring "had to happen" because of falling coal prices. "I'm pleased to see somebody has grabbed the bull by the horns," he said.

"It could have been allowed to carry on as it was and get a lot worse."

Howard said the region was resilient and needed to look at other means of generating income, including horticulture and secondary processing of natural resources, such as creating carbon fibre.

"It really does force us to have a look and say, 'Well, what else can we do?' " he said.

Solid Energy chief executive Dan Clifford said "any job loss in my book" was not a desired outcome.

"We've made it pretty clear to the staff up there that change was necessary," he said.

"The business has to be profitable to have a future."

He said the company was targeting savings of about $60 million through the restructuring.

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'SHORT-SIGHTED GREED'

Solid Energy has about 120 contractors working in specialist roles or working part-time, and the company planned to bring more of that work "in-house", reducing the number of contractor jobs by about 50.

The company planned to 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 its operation.

It also planned to make changes to rosters and training to increase the number of employees who could carry out a range of jobs at the mine.

"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," Clifford said.

The company proposed a two-week consultation period with Stockton employees and aimed to implement new rosters by the end of next month.

The Engineering, Printing and Manufacturing Union said mismanagement of Solid Energy's finances contributed to today's job losses.

Garth Elliot, union organiser for the Stockton miners, said the Government allowed Solid Energy to rack up debt and overvalue itself in the hope that the Government could "flog it off" as part of its asset sales programme.

"We didn't have to end up here," he said. "Everyone knows times are tough in coalmining, but the company has no ability to weather the current conditions."

Elliot said the Government made decisions based on "short-sighted greed" and it was the miners who were paying the price for that today.

The union represented more than 300 Stockton miners and would work with Solid Energy to ensure any redundancies were made as fairly as possible, he said.

Labour state-owned enterprises spokesman Clayton Cosgrove said today's job losses followed another 700 lost because of Solid Energy's "disastrous" management.

He said SOE Minister Tony Ryall and Finance Minister Bill English were "warned repeatedly" about the problems facing Solid Energy, but took no action.

"Tony Ryall is responsible for every one of these job losses," Cosgrove said.

NZ First leader Winston Peters said the Government had neglected the regions, leaving nothing to soften the blow felt by the West Coast today.

"It's been a one-way street as the regions produce our exports, in particular from dairying, forestry and mining, and the Government reaps the rewards," he said.

Peters wanted 25 per cent of royalties for the mining of minerals to stay in the regions.

"If this had been in place in 2013-14, more than $80 million would have gone towards regional development and would have helped create new enterprises and new jobs," he said.

Today's announcement was not news for Stockton contractor Kaipara, which had already agreed to end its contracts with the mine early because of falling global coal prices.

Twenty-one staff were told last week that they would lose their jobs, director Steven Riddell said.

"Those 21 people are very good people. It's nothing they have or haven't done; it's just circumstances," he said.

Over the past couple of years, about 400 Stockton workers have lost their jobs.

The opencast mine has been hit by lower international demand for high-quality coking coal, particularly from China.

'LIFE SUPPORT'

Prime Minister John Key confirmed earlier that there would be job losses at the mine.

While the Government felt for the families involved, the state-owned company was responding to low international coal prices, he said.

That approach was consistent with the actions of coal companies around the world.

"I know they're working very hard to preserve as many jobs as they can," he said.

Solid Energy was effectively receiving "life support" from the Government.

"If it wasn't for the intervention by the government, the company would have fallen over some time ago," he said.

A Solid Energy spokesman said the spot trading price for high-quality hard coking coal was about US$113 ($170) a tonne.

It is understood Solid Energy needs a price of about US$145 a tonne for the Stockton mine to break even.

The price got as high as US$330 a tonne in 2011.

- The Press

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