Axe falls on Spring Creek

The pull-back from underground mining has been made in favour of lower-cost, open-cast operations. Photo / APN

The axe suspended for two months over Greymouth's Spring Creek Mine finally fell today, amputating more than 200 jobs.

Solid Energy confirmed to staff it planned to place Spring Creek into care and maintenance, as it cuts costs to cope with plummeting coal prices.

Chief executive Dr Don Elder said the company was very aware what its decision would do to the West Coast economy. However, given the current outlook for international semi-soft coking coal prices, the Spring Creek operation remained uneconomic.

The decision meant redundancy for about 220 staff at Spring Creek Mine and the nearby Rocky Creek coal handling and processing plant, said a Solid Energy statement.

Redundant staff could apply for positions in a team of 16 which would maintain the mine and a team of four at Rocky Creek which would continue to operate processing coal from the company's Strongman mining licence area.

Solid Energy had committed to work with the community to minimise the impact of winding down the Spring Creek operation and to help staff find new employment, the statement said.

Solid Energy would retain human resources staff in Greymouth for 12 months to co-ordinate with potential employers, including exploring opportunities in the Christchurch rebuild.

About 150 people attended a meeting with representatives of the Stronger Christchurch Infrastructure Rebuild Team (SCIRT) in Greymouth on September 28 to outline the opportunities. SCIRT had received about 100 applications of interest to date, today's statement said.

Solid Energy had also retained Stellar Recruitment to help staff interested in mining opportunities in Australia.

Solid Energy believed Spring Creek Mine still had potential if, or when, international markets strengthened for steel-grade coal, particularly as a blend-stock for some production from other mines, or as a speciality product.

"For that reason the company has decided to place the mine into care and maintenance, which preserves future options, rather than closure, which would make it nearly impossible to recover flooded infrastructure and reopen the mine in future,'' the statement said.

A number of workers have already left Spring Creek, which had 254 employees this time last month.

Staff have been on full pay for almost two months since Solid Energy announced on August 29 that it was suspending all operations at Spring Creek as part of the company's restructure.

Solid Energy is also cutting corporate, support services and development jobs from 313 to 151 and Huntly East Mine jobs from 234 to 171.

Solid Energy has announced no job losses at Stockton opencast mine, but several contractors have laid off staff there.

The News has previously estimated that more than 100 contractors' jobs have gone at Stockton, including 63 with Kaipara, 11 with Geotech, eight with MBC and over 40 Coastwide with Boart Longyear.

More job losses are expected.The benchmark price for hard coking coal fell 30 per cent in the September quarter to US$225 a tonne compared to US$315/t in the same quarter last year. However, the spot price, which many customers demanded, fell to below US$120/t in some markets, according to Solid Energy's quarterly report.

Stockton mine's production rose 16 per cent to 475,000 tonnes compared to the same quarter last year. Spring Creek's production fell 95 percent to 5000 tonnes as the mine continued in development with no coal extraction.

Coal sales for the quarter fell 11 per cent to 1m tonnes.