Almost 140 jobs are to be axed at Solid Energy's Stockton mine, the company announced today.

Continuing low international coal prices was to blame for the proposed job cuts, it said.

Revealing the proposal to staff, Solid Energy said 137 jobs could go from the Stockton workforce of 521 - incorporating 35 management, technical, support and administration jobs and 102 mining jobs. A further 50 mining contractors' jobs are also in line to be axed.

Production at the West Coast export mine would be reduced by a quarter, from 1.9 million tonnes per annum, to 1.4 million tonnes per annum, in the next financial year.


The proposed changes were a necessary response to the depressed export market which was expected to remain for quite some time, Solid Energy chief executive Dan Clifford said.

"On current pricing projections, we have to minimise our losses by reducing costs so that we can keep the mine operating.

"We feel for the staff and their families, and for the wider Westport community, who will be affected by this, but by reducing activity we believe we can keep the operation viable with the continued benefits for the community."

If the proposals are implemented, the company would also 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 the operation, he said.

"While Solid Energy's domestic business has been stabilised, the export business has continued to see falling prices from the 2011 highs of US$330/tonne," Mr Clifford said.

"Even more recently the price has continued to decline with the quarterly benchmark price for hard coking coal falling from US$143/tonne for the January to March quarter, to US$120/tonne for the current quarter while the spot price has been sitting at about US$113/tonne for the last two months.

"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."

A two week consultation period will begin with with Stockton employees. It would be followed by a confirmation of the structure and selection process for contested and vacant roles, with the aim of implementing new rosters by the end of July, Solid Energy said.

Mining union the EPMU labelled the plans "short-sighted greed" stemming from serious mismanagement of the company by its previous board and management.

"We didn't have to end up here," said Garth Elliott, EPMU organiser for the Stockton miners.

"Everyone knows times are tough in coal mining, but the company has no ability to weather the current conditions.

"That's because the government allowed Solid Energy to rack up debt and overvalue itself in the hope they could flog it off as part of the asset sales programme.

"They made decisions on the basis of short-sighted greed, and the miners are paying the price for it today."

The union would work with Solid Energy management to ensure any redundancies were made as fairly as possible, he said.

EPMU members are entitled to redundancy pay under the terms of their collective agreement.

New Zealand First leader Winston Peters said the West Coast was reeling at the news of further job losses.

The National Government's "total neglect of the regions means there is nothing to soften the blow", he said.

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

"The announcement today of 137 more jobs being lost at Stockton mine follows hundreds of other job losses on the West Coast, and in other regions ? the high dollar is crippling many producers and exporters and lack of diversity is hindering job creation."

Labour's state-owned enterprises spokesman, Clayton Cosgrove, said the Government's "disastrous management" of Solid Energy was to blame for the job losses.

"The loss of 137 jobs is yet another massive blow to the people of the West Coast, alongside the more than 700 other Solid Energy jobs lost," he said.

"With much of its workforce gone, Stockton will end up operating under capacity, along with Spring Creek which has been mothballed. National has campaigned on promoting mining in New Zealand but ironically it's shutting them down instead."

State-Owned Enterprises Minister Tony Ryall was "responsible for every one of these job losses", Mr Cosgrove said, branding him "the most negligent and incompetent SOE Minister in history".