93 jobs to go at Huntly East Mine
Miner: 'We didn't expect that many'MATT BOWEN
Solid Energy bosses say ''depressed'' coal prices are behind their plan to slash production by a third and cut 93 jobs from Huntly East Mine.
At an announcement in Huntly Solid Energy Chairman, Mark Ford, said the SOE was reviewing all parts of its business in response to the downturn in the international coal market and its high levels of debt.
The comapny is shackled with nearly $400m of debt from failed ventures and poor prices combined with high overheads.
Workers were earlier today told 93 staff would lose their jobs at Huntly East Underground Mine. Management, support services and workforce roles would be cut by 107, from 193 to 86.
If the proposal is implemented, 93 people would be made redundant, (24 management and support services staff and 69 mineworkers at Huntly East Mine) as some of the roles are currently vacant due to a hiring freeze.
The number of working areas at Huntly East Mine would be cut from three to one, worked on two shifts, five days a week with maintenance and monitoring work carried out at the weekend.
"We continue to believe that Solid Energy has a good operating future and our North Island operations have an important role in that. The company has a long history in the Huntly community and we know this news will have a big impact on local families and the local area," Mr Ford said. "We hope to be in a position to reinvest in the Waikato once there is a sustained improvement in the market."
"We want to keep Huntly East open as we think there is long-term value in the asset and in the short to medium term we want to keep our options open. But with current international prices and given Solid Energy's need to generate cash and not incur further debt, the economics of mining underground at Huntly East Mine do not justify keeping the operation going in its current form. We have to get our costs down and we plan to do that at Huntly East by stopping all development work and cutting production to a third of last year's, to about 100,000 tonnes."
Speaking earlier outside the meeting miner Bill Baker, 61, said workers had been told there would be no more production at the mine for the next four weeks with miners sent home on full pay until the next steps were decided.
Only maintenance work would continue in the meantime.Baker said he and other workers were surprised by the number of jobs lost.
"We didn't expect that much," he said.
While he would assess his options he felt sorry for workers with young families and strong ties in the area.
Employers and Manufacturers Association chief executive Kim Campbell said the cuts were inevitable.
''You've got to accept Solid Energy fell into a bit of a hole. They've got to do two things - clear the decks from the previous ventures and then get the boat on an even keel to go forward.''
Campbell said underground mining had become really expensive and the world price for coal had dropped dramatically, making it uneconomic.
''There's nothing that can be done about that.''
He believed the Christchurch rebuild could absorb some of the blow from the 93 jobs lost.
''These guys don't just carry a shovels - they're engineers, drivers, forklift operators and safety workers,'' Campbell said. "In Christchurch ... there's a job for these people in a heartbeat.''
Waikato Chamber of Commerce chief executive Sandra Perry, who lives in the Huntly community, was ''pretty shocked'' by the extent of the cuts.
''It's going to have a major impact on Huntly's economy, that slowdown effect. That's 93 jobs, that's 93 lost incomes in our community and it's big blow to the whole region.
''It impacts on 93 families, that's children at school and it's wives working. It means some of those families will have to relocate.''
Perry said people were in shock but that the community was resilient because it's had to be.
"Mining here has gone up and down on a regular basis, but if you look at unemployment nationally and regionally right now, it's not healthy.
''I don't think it's been good for the Waikato, there's promises that have been made to miners who then upskilled only to see more cuts. Central government has quite a lot to answer for here,'' she said.
She said after jobs were cut in the mine last year, many of those made redundant had relocated to Australia for work but some lacked confidence in prospects across the ditch.''I don't believe it's that strong an industry in Australia anymore, I don't believe that is an option for these guys.''
Twelve months ago the mine cut job numbers from 234 to 171, due to the cancellation of a major ventilation project and the halting of all major underground development.
Further job losses are another blow to the Waikato region following recent restructure announcements from other companies that will see almost 400 jobs go in the region.
The bulk include 180 from AgResearch and 129 from NZ Post in Hamilton, while Aria Farms, Metso (Matamata) and Hopper Construction - affected by the downturn in the coastal property market - will cut about 56 between them.
- © Fairfax NZ News