Spring Creek Mine into care and maintenance

Solid Energy confirms it will put Spring Creek Mine into care and maintenance

Solid Energy has confirmed to staff its plan to place Spring Creek Mine into care and maintenance, part of a wider reorganisation in response to extremely weak global coal markets.

Dr Don Elder, Solid Energy’s Chief Executive Officer says the company is very aware of the impact its decision will have on the West Coast economy but given the current outlook for international semi-soft coking coal prices, the Spring Creek operation remains uneconomic.

The decision means redundancy for about 220 staff at Spring Creek Mine and the nearby Rocky Creek coal handling and processing plant. The company will offer redundant staff the opportunity to apply for positions in a team of 16 which will maintain the mine and team of four at Rocky Creek which will continue to operate processing coal from the company’s Strongman mining licence area.

Solid Energy has committed to work with the community to minimise the impact of winding down the Spring Creek operation and to help staff find new employment. It will retain dedicated capability in Greymouth for 12 months to explore a number of opportunities including the Christchurch rebuild. About 150 people attended a meeting held by representatives of the Stronger Christchurch Infrastructure Rebuild Team (SCIRT) in Greymouth on 28 September to outline the opportunities they had available. SCIRT has received about 100 applications of interest to date. Solid Energy has also retained Stellar Recruitment to assist staff interested in mining opportunities in Australia.

Solid Energy believes the mine still has potential if or when international markets strengthen 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.
Notes:
1. Of the 254 Spring Creek employees referred to in Solid Energy’s announcement of 24 September 2012, about 20 people have already left the company and a few may apply for roles in other parts of the business.
2. Care and maintenance is a transitional state, a time when a mine has stopped production for technical, environmental, financial or other reasons but the owner has not yet decided if or when mine operations will resume, or if it will be sold, or closed and abandoned. During care and maintenance, a smaller workforce ensures the mine presents no danger to human life or the environment and that any remaining capital equipment, including developed roadways, is maintained in a state which does not excessively constrain future options.
3. On 8 October Solid Energy confirmed plans to reduce corporate, support services and development jobs from 313 to 151. On 12 October, it confirmed the selection of the Huntly East Mine workforce reducing from 234 positions to 171 and the moving to a five day a week operation.
ENDS

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