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Job losses possible as Solid Energy restructures coal mine

World Coal,

In response to depressed global coal prices, Solid Energy has announced it is proposing to restructure its management and support services at the company’s Stockton mining operations. The restructuring would involve cuts to management and support services jobs.

The company has outlined a change proposal to management and support services employees at Stockton Mine, which would see the number of these roles reduced by 45, from 186 to 141.

If the proposal proceeds, 15 people are likely to be made redundant. That is because a number of roles are currently vacant due to a hiring freeze that has been in place since August last year.

The Stockton Mine is the largest open cast mining operation in New Zealand, producing high quality metallurgical coal. The mine is estimated to have enough recoverable resources to continue operating for a further 20 years.

Solid Energy chairman, Mark Ford said, “While the Government, as owner of Solid Energy, continues to work with the company’s funding partners to determine the future of Solid Energy’s capital structure, we remain confident that the business has a good operating future and Stockton’s role in that is central. The company is committed to the Buller and Stockton mining operations.

Ford indicated Solid Energy’s future was reliant on costs being brought down further, with the company operating “within the volatile pricing of the international coal market.”

Ford continued, “The proposed changes in management and support services jobs reflect that and are necessary to ensure the mine’s profitability in the current market for steel-making raw materials, including the high-quality coking coal the mine produces for export.

“The short and medium-term mine plans for Stockton include simplifying the mining operations, with less exploration, resource proving and other activities that go into new pit development,” Ford said. “These changes are essential for Stockton to operate at current international steel coal prices of around US$ 131.50/t, versus US$ 225/t a year ago and US$ 330/t in mid-2011.”

Last month, Stockton Alliance, the mine operator, reached an agreement with the Engineering Printing and Manufacturing Union that allows for the flexible workforce rosters needed to adjust to any further downward pricing in the market.

Adapted from press release by Samuel Dodson

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