Continuing weakness in world prices for high grade coking coal appears likely to trigger a new round of job losses at Solid Energy's main open-cast coking coal mine, Stockton, bringing further bad news to the Westport community following Bathurst Resources' decision to place its new mining plans on hold indefinitely earlier in the year.
A Solid Energy spokesman disputed a figure of 300-plus job losses from the 514-strong workforce at Stockton, reported by the RadioLive network, but confirmed the company would be speaking to staff at the mine tomorrow morning and briefing media in the early afternoon.
If confirmed, the restructuring will be the first major act by the company's newly appointed chief executive, a former senior manager at Australian miner Glencore, Dan Clifford, who took the reins at the troubled state-owned collier last month.
The expected decision comes amid continuing weakness in the value of high-grade coking coal, used in steel-making as surging production from mines in Queensland depresses prices globally and Chinese steel production continues to be weak after years of strong demand.
Coking coal was fetching above US$300 a tonne in 2011, but briefly slipped below US$100 a tonne in March, while contracts in the second quarter of this year have been written at around US$120 a tonne, 14 percent down on the first quarter, and the lowest since 2008, according to minerals website, Mining.com.
Australian media reported Glencore Xstrata was cutting back production of coking coal in favour of thermal coal because of the flood of exports from Australian mines owned by BHP Billiton, Anglo American and Wesfarmers, and that North American coking coal producers have also been cutting production in response to coking coal prices
The Australian Financial Review reported the Queensland Resources Council president Michael Roche on May 28 as saying 10 percent of miners in the state were in a "very precarious position" and predicting more mine closures, with a quarter of its coal mine being produced at a loss.
This article is tagged with the following keywords. Find out more about MyNBR Tags
Most listened to
- Sunday Business Episode 34 featuring Hayden Cox
- Matthew Hooton on what a National win in Mt Roskill could mean for Labour
- Tim Hunter on Sky's awkward Chinese problem
- Paul Goldsmith's attempt at insolvency law reform has been hijacked by a 'basked of deplorables' says Damien Grant
- Business Week in Review with Grant Walker & Andrew Patterson