Workers to hear Solid Energy restructuring plans

State-owned coal miner Solid Energy is to announce further restructuring tomorrow, possibly including job losses, which will be a “shock” for the West Coast, Labour MP Damien O’Connor says.

In March, the company foreshadowed more redundancies at its Stockton mine, near Westport, because of slumping global prices for coking coal.

It was talking to its banks to restructure its borrowing.

Chief executive Dan Clifford told Parliament’s finance and expenditure select committee plans were under way to stem the losses, and “reductions will be inevitable on the basis of those plans.”

Staff were being kept informed of the company's difficulties and decisions are "not a matter of days or of double digit months," Mr Clifford said.

Now, Labour’s MP for West Coast-Tasman, Damien O’Connor, says he has his fingers crossed any job losses will be minimal.

The company is to meet staff tomorrow to update them on restructuring plans.

Mr O’Connor told TV3 up to 400 people will be waiting to hear about their jobs, with any losses likely to cause a “shock” to the West Coast communities.

“Now the reality of a slump in the coal price will hit the miners as it has too often throughout history,” Mr O’Connor says.

“The West Coast will survive as it has in the past but the immediate impact on many young local families will be devastating.”

In March, acting Solid Energy chairman Andy Coupe would not speculate on whether the company might fail but said there were "a number of potential outcomes" from current discussions with its banking consortium and that Solid Energy was "expecting no further support from the Crown."

Finance Minister Bill English questioned whether Solid Energy remained commercially viable.

Restructuring and cost-cutting had reduced Solid Energy's breakeven price for coking coal to between $US120-130 a tonne, but it was basing its plans on a price in the year ahead of $US110 a tonne.

Solid Energy has also said it risks breaching its banking covenants in September 2016.

Mr Coupe said there were no immediate cashflow problems but it was unlikely to be enough to overcome the September 2016 issues.

“My view is that we cannot see the refinancing of our debt facilities is realistic absent a restructure of our liabilities."

The government helped bail out Solid Energy in 2013 and also extended a $103 million indemnity to the company just before the general election last year.