Spring Creek mine work suspended

By Hayden Donnell

Spring Creek coalminers mull an uncertain future after an hour-long meeting with Solid Energy management this afternoon. Photo / Greymouth Star
Spring Creek coalminers mull an uncertain future after an hour-long meeting with Solid Energy management this afternoon. Photo / Greymouth Star

Solid Energy is set to cut 140 jobs and suspend operations at Spring Creek mine on the West Coast.

The state owned energy company confirmed this afternoon the Spring Creek mine would shut down while it carries out a review involving "many complex issues".

About 230 people work at the mine north of Greymouth.

Another 63 jobs are to be cut at Huntly East Mine in Waikato, decreasing its total staff numbers from 234 to 171 positions, Solid Energy said.

About 60 mainly contracting roles will also go at the mine's ventilation upgrade project.

In total, the restructure was expected to cut 140 jobs - about 75 in coal operations and 65 in other areas of the business.

The company was also aiming to cut capital expenditure by about $100 million in the current 2013 financial year by cancelling or postponing most of its discretionary investments and development programmes.

It said the moves were necessary because of impact of the "extremely challenging" global coal market on its business.

The coal company's chief executive Don Elder said the decisions were the result of a comprehensive review of its business.

"I am very aware of the impact these decisions will have on affected staff members and our communities, but we've had to make these difficult decisions to cushion the impact of the market and protect as much as we can of the long-term value of the business."

Elder said he believed Spring Creek still had potential if the international market turned around, as did Huntly East if the company could secure satisfactory long-term contracts with its major North Island customers.

West Coast MP Damien O'Connor said the decision to suspend operations at Spring Creek was a devastating blow for the West Coast.

"There has been much hype and hope generated by the company, and many workers have invested in their future based on that hope.

"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."

Mr O'Connor blamed the job losses on the Government's decision to include Solid Energy in its planned partial asset sales.

"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 suffer the consequences.

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

Engineering, Printing and Manufacturing Union assistant national secretary Ged O'Connell said the cuts were "not a done deal".

He said the union planned to meet with miners to discuss a response to the proposed job losses.

"Under this proposal anyone who wants to stay in underground mining would have little option but to move to Australia, and once they're gone it'll be very hard to get them back.

"The loss of so many skilled, experienced miners would have a real impact on productivity and safety in New Zealand mines for years to come.

"Our priority now is to get together with our members, look at Solid Energy's business case and see whether there are any alternatives that don't involve such drastic cuts."

The timing of Solid Energy's announcement is "concerning" as it is on the block as part of the Government's asset sales programme, Mr O'Connell said.

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

- Herald Online

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