Among hundreds of jobs set to be axed by Solid Energy are 65 from its Christchurch headquarters.
The company yesterday said 123 jobs would go at its Huntly East coalmine in Waikato and it threw doubt over the 370 jobs associated with the Spring Creek coalmine near Greymouth.
A total of 65 would also be axed from its large head office in Christchurch.
The miners and contractors at the Spring Creek mine are in limbo after the state-owned energy company announced the suspension of operations at the mine yesterday.
The Huntly East underground mine will cut 63 staff and 60 contractors because the company is stopping further development.
Another 65 staff at the Christchurch head office and 17 staff from other parts of the business are also in the firing line.
Grey District Mayor Tony Kokshoorn was not surprised by Solid Energy's announcement but said its closure would have "grave consequences".
"We are resilient here on the West Coast and will get through this, but it's certainly a case of it never rains, it pours."
The community was still reeling from the Pike River tragedy that killed 29 men in November 2010 and closed that underground coalmine, he said.
Kokshoorn questioned why Solid Energy had recently promoted its proposed Liverpool mine near Greymouth.
"My heart goes out to those loyal workers who have to sit there waiting for what seems to be an ominous decision pending,'' he said.
"They are a loyal workforce and many had opportunities to go overseas and make a lot more money, but they chose to stay.
''[Solid Energy] needs to make sure that loyalty is not rewarded by redundancy. A lot of them will just take a one-way ticket to Australia."
West Coast-Tasman Labour MP Damien O'Connor said it was a devastating blow to the region.
"This is a sudden and sad turnaround and it will have a severe effect not only on the workers and their families but on a much wider community," he said.
Solid Energy chief executive Don Elder said the Spring Creek employees would not return to work until a review was completed, but he could not say how long that would take.
He said staff working in a mine while worrying about losing their jobs was dangerous.
"There's no fairness in anything in a situation like this, but getting the right answer and providing clarity is the right solution."
Spring Creek would either continue as it was, with lower activity levels, be put into care and maintenance, which was "mothballing", or shut down.
He said the company would sell or close its Biodiesel New Zealand business after government subsidies dried up, making the operation unprofitable.
"Nobody knows better than us, coming from the industry, how hard it has been to make renewables economic," Elder said.
Staff would be able to comment on the proposals, with a final decision to be announced late next month.
Elder said the company had to focus on the cheaper opencast mining and new techniques to reach deep coal as underground mining was not viable, with coal prices as low as US$200 (NZ$250) a tonne.
Losing skilled staff to Australia had been par for the course over the past few years - the company has a 20 per cent staff turnover - and that would continue, but coalminers across the Tasman were dealing with the same downturn, he said.
Underground mining was inefficient and "very hard''.
''It's becoming harder, it's becoming problematic," he said.
"After 110 years of mining in New Zealand, the easy coal has gone."
New technology was needed to reach the significant amount that was left deep underground, which was why the company was pushing its underground coal gasification and coal seam gas projects, he said.
Elder said he was refusing a short-term incentive payment and had taken a 10 per cent reduction in his $1.41 million salary.
His chief operating officer, Barry Bragg, will leave the company after his position was cut.
'THERE ARE A LOT OF STRESSED PEOPLE'
Hundreds of West Coast mining staff will 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 the 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 viability.
Staff were given a letter stating operations at the mine 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 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 are 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,'' he said. ''There are 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," he said.
Another miner, who declined to be named, said most workers were stunned.
They had been confident the mine 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," he said.
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,'' he said.
"Any good company, mining or otherwise, would have a more measured and longer-term view of both job and company prospects."
- © Fairfax NZ News
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