Spring Creek: 500 breadwinners out of work

Grey District mayor Tony Kokshoorn and Spring Creek union delegate Trevor Bolderson lead the delegation of coal miners onto Parliament Grounds today. Photo / Mark Mitchell

Close to 500 breadwinners will lose their jobs, and more than $50 million a year will be sucked out of the Greymouth economy, as Spring Creek Mine is moved into care and maintenance.

When children and wives are added in, more than 1000 people will be directly affected - coalminers, contractors and service industry staff.

Already reeling from the Pike River Mine disaster, Greymouth now stands to lose the $19.1 million the mine paid out annually in wages. The average miner's pay at Spring Creek was $82,000.

Pike River Coal Ltd was spending $70m annually before the mine blew up, and almost two years later, some local contractors are still owed $4.5m.

Spring Creek union delegate Trevor Bolderson said before Monday's announcement, the union had calculated that if 100 men lost their jobs the local economy would lose $26m.

In fact, 360 miners and contractors are out of work, pushing the figure well beyond $50m.

Mr Bolderson said they thought every job lost would result in a further 1.5 indirect job losses.

When asked what businesses would be impacted, other than engineering firms, he said: "Laundry, KiwiRail (rails coal), concrete company, pest control, cleaning contracts, chemical manufacturers for the Rocky Creek plant. It's endless. You sit down and think, and it just goes on and on.''

Union organiser Garth Elliott added to the list: "Restaurants, pubs, direct contractors.''

Businesses in Greymouth are already struggling with high rental increases and the prospect of expensive earthquake-proofing.

Peter O'Sullivan, from Minerals West Coast, said using economic group Berl's calculators, a total of 483 jobs would go on the Coast.

When the average household size on the Coast was added in, about 1100 people would be directly affected (assuming there was one breadwinner).

However, some workers would hopefully be moved over to developing the nearby Liverpool open-cast mine.

Cliff Sandrey, whose company used to drive the Pike River bus, said there had not even been time to recover from the Pike disaster. After that, many businesses had their work topped up by Solid Energy.

"That kept things going.''

The Star attempted to contact major contractors; some spoke off the record about plans to downscale, while others had already laid off staff.

McConnell Dowell managing director Roger McRae said his company employed close to 40 staff on the Coast - all at Spring Creek - and had been given notice its contract was being terminated.

With no other contracts on the Coast, that could mark the end of its presence there.

"For us it's deeply disappointing, a bitter blow.''

The company should be able to transfer some staff outside the region, he said.

West Coast-Tasman MP Damien O'Connor said everyone "knew full well the extent this pain will extend''.

He was trying to arrange a brain-storming session with business and community leaders.

Mr Bolderson, who was travelling back from Wellington after failing to convince Cabinet ministers yesterday, said the final piece of the jigsaw had fallen into place.

After a 1000-strong street march in Greymouth, meetings with Solid Energy chief executive Don Elder and the trip to the Beehive, they were told yesterday by State-owned Enterprises Minister Tony Ryall that the company was "in debt to the tune of $330 million''.

"We had to go to the minister to find out what Solid Energy could have gone through (with us) on day one. It's staggering.''

Mr Bolderson said he understood the Government could not pay off debts of $330m.

He called for Dr Elder's job to go, and said former chairman John Palmer's recent departure was "rats deserting a sinking ship''.

Meanwhile, a letter from former Timberlands accountant Jacqui Low to the Prime Minister, analysing Solid Energy's finances based on public documents, has been released.

She said the 2011 annual report showed borrowings of $45m, including $20m to pay a dividend - "borrowing to pay the Government''.

The rise in unemployment would reduce the Government's tax take by $12m, she said.

Solid Energy today confirmed its debt as at June 30, was $295m. By August it was $335m, and was now $375m.