Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Solid Energy to cut a quarter of its Stockton mine workforce

Solid Energy to cut a quarter of its Stockton mine workforce

By Pattrick Smellie

June 6 (BusinessDesk) - State-owned coal miner Solid Energy has announced redundancies for just over a quarter of its workforce at the open-cast Stockton mine, on the West Coast near Westport, in response to a prolonged period of depressed global prices for the coking coal mined at the site for use in steel production.

Newly appointed chief executive Dan Clifford told BusinessDesk the moves on their own were "not quite" enough to return Stockton to profitability on an earnings before interest, tax, depreciation, amortisation and movements in the value of financial instruments basis.

"There are more efficiencies that we need to continue to work through", although today's announcements were a "big step forward in getting to a cash neutral position" in the export-oriented coking coal part of the business, which accounts for about half of Solid Energy's workforce.

Some 132 of the mine's 521 positions are expected to be made redundant as the mine reduces annual output from 1.9 million tonnes to 1.4 million tonnes in a move expected to last at least two or three years, the newly appointed chief executive, Dan Clifford, said in a statement today.

“On current pricing projections, we have to minimise our losses by reducing costs so that we can keep the mine operating," said Clifford, whose previous employer, Australian miner Glencore Xstrata is also reducing production and its workforce as Australian coking coal mines go through similar adjustments, brought on in part by lower economic growth in China, which kept steel demand alive after the global financial crisis.

“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," said Clifford in a statement. The redundancies will target 35 management, technical, support and administration roles, and 102 miners' jobs.

An additional 70 or so contractor roles will be lost as the mine brings activity in-house, leaving around 50 contractors on-site instead of 120 today.

Non-essential development work will stop, mining will focus on lower cost pits, and most mining will occur during daylight hours. Changes to rosters and training to increase staff ability to perform multiple tasks are also under way.

Solid Energy went through a financial crisis in 2012 and 2013 as plummeting coking coal prices undid the economics of a business that had expanded rapidly into several new areas of potential, including bio-fuels, wood pellet burner manufacturing, and exploitation of low value lignite coal deposits for fuel and fertiliser.

"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," said Clifford who took over as chief executive last month. "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.”

Solid Energy is proposing a two-week consultation period with Stockton employees, followed by confirmation of the structure and a selection process for contested and vacant roles with the aim of implementing the new rosters by the end of July.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Insurers Up For More Payouts: Chch Property Investor Wins Policy Appeal In Supreme Court

Ridgecrest NZ, a property investor, has won an appeal in the Supreme Court over insurance cover provided by IAG New Zealand for a Christchurch building damaged in four successive earthquakes. More>>

ALSO:

Other Cases:

Royal Society: Review Finds Community Water Fluoridation Safe And Effective

A review of the scientific evidence for and against the efficacy and safety of fluoridation of public water supplies has found that the levels of fluoridation used in New Zealand create no health risks and provide protection against tooth decay. More>>

ALSO:

Scoop Business: Croxley Calls Time On NZ Production In Face Of Cheap Imports

Croxley Stationery, whose stationery brands include Olympic, Warwick and Collins, plans to cease manufacturing in New Zealand because it has struggled to compete with lower-cost imports in a market where the printed word is giving way to electronic communications. More>>

ALSO:

Prefu Roundup: Forecasts Revised, Surplus Intact

The National government heads into the election with its Budget surplus target broadly intact, delivering a set of economic and fiscal forecasts marginally revised from May to reflect weaker commodity prices and a lower tax take. More>>

ALSO:

Convention Centre: Major New SkyCity Hotel And Laneway For Auckland

Today SKYCITY Entertainment Group Limited revealed plans to build a new hotel and pedestrian laneway of bars, restaurants and boutique shopping on land it owns in the Nelson and Hobson Streets block, expanding the SKYCITY Entertainment Precinct. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news