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Solid Energy slashes staff by 25%, worse to come

Sweeping cuts to operations and staff will affect hundreds of energy company workers and outside contractors.

Chris Hutching
Tue, 25 Sep 2012

Solid Energy directors has announced sweeping cuts to operations and staff.

Corporate, support services and development jobs will be cut by half 50% –  from 313 to 150 jobs, mostly in Christchurch.

Total jobs overall will be slashed by 25% to about 1360, compared to 1800 at the beginning of 2012.

Staff have been in shock for the past couple of weeks since the changes were first signalled. 

The company has also announced yesterday a proposal to put Spring Creek Mine near Greymouth into care and maintenance, and it will reduce output and cut staff numbers at Waikato's Huntly East Mine.

Solid Energy chairman Mark Ford confirmed a revenue shortfall of more than $200 million in the current financial year, and says there may be worse to come.

Chief executive officer Don Elder  told Spring Creek staff this afternoon the company could not afford on-going costs of the operation.

It will now begin a period of consultation with Spring Creek Mine staff members, who will remain on full pay in the meantime. All underground work at the mine, except essential safety and maintenance operations, will remain suspended.

If the company confirms its proposal, staff there will reduce from about 254 to about 32.

Up to two months of underground work will be required to set up the mine for care and maintenance, including some tunnelling to enable adequate ventilation. A staff of about 20 will then maintain the mine infrastructure.

The decision will also affect the jobs of up to another 130 people, employed by contractors, many of whom had been on the site as part of a development project.

The company will assist affected staff to find new employment and will retain dedicated capability in Greymouth to explore a number of opportunities, especially in the Christchurch rebuild and in the industry in Australia.

The company says it is in active discussions with the Stronger Christchurch Infrastructure Rebuild Team and with mining workforce companies in Australia.

Mr Ford says Spring Creek Mine has not been profitable for some time. Since Spring Creek Mining Company was set up in 2007 it has lost more than $100 million.

It has been in a development phase since the end of 2011, with minimal coal production, and has cost the company $50 million during this time.

Spring Creek would not have returned to full production until early next year and, to reach that point, a further $40 million to $70 million would have been needed.

The company described the announcements today as “proposals”.

Chris Hutching
Tue, 25 Sep 2012
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Solid Energy slashes staff by 25%, worse to come