Mining trouble as 900 jobs slashed

12 years ago | Posted in: Business | 779 Views

TWO of the world’s biggest miners have slashed close to 1000 local jobs today in response to falling coal prices and the high Australian dollar.
BHP Billiton and Xstrata Coal today separately announced plans to scale back their coal operations in Queensland, with BHP revealing it would shut its Gregory open-cut mine.

The closure will result in nearly 300 coal miners losing their jobs, including 55 direct employees and 242 contractors, a BHP spokesman said.

The decision by the BHP Billiton Mitsubishi Alliance (BMA) came after an operational review found the 33-year-old open-cut mine was no longer profitable.

Coking and thermal coal prices have been falling while high costs and a strong Australian dollar have also impacted on the mine, the miner said in a statement today.

Production at Gregory will stop on October 10, when the mine will be put on a care and maintenance program, meaning it could re-open if conditions improve.

BMA’s mines in Queensland’s Bowen Basin were the scene of industrial action, including strikes, earlier this year over an enterprise bargaining agreement offer.

BMA Asset president Stephen Dumble said production costs for the open-cut Gregory mine currently exceed the revenue from product sales, and therefore the only option available to the company was to cease production.

“We understand that this decision will have an impact on our employees, their families and the Emerald community,” he said in a statement. “We will work closely with our workforce and look for opportunities to redeploy affected employees to other BMA operations.”

The adjacent Crinum underground mine will continue to operate along with the Gregory Coal Handling Preparation Plant.

BMA would continue to review its remaining portfolio of assets to ensure that each operation can be cost competitive and profitable across the price cycle, he said.

Production also stopped at BHP Billiton’s loss-making Norwich Park coal mine in central Queensland in May.

The job cut comes nearly a month after BHP decided to shelve some of its larger capital investment projects, including the $30 billion Olympic dam expansion project and the $20 billion Outer Harbour development in Port Hedland, in response to the global economic volatility.

Xstrata Coal
Meanwhile, Xstrata today announced it will cut 600 jobs from its coal operations, including contractors and permanent staff, but did not reveal how many jobs will be cut from each of its sites.

Most of Xstrata Coal’s Australian operations are located in the Hunter Valley in NSW and Queensland’s Bowen Basin.

The company employs 16,000 people worldwide, and says the majority are located in Australia. Xstrata Coal said the job cuts would be made as it scaled back high cost production at some of its mines.

“We do not expect a material impact on Australian production volumes,” the company said in a statement today. “We are also reducing some roles at our corporate headquarters in Sydney and consolidating our office-based operations in Queensland.”

The restructure was implemented in response to “industry-wide pressures including low coal prices, high input costs and a strong Australian dollar against the US dollar,” Xstrata Coal said.

Approved growth and expansion projects, at Ravensworth North and Ulan West in NSW and Rolleston in Queensland would proceed as planned, it said.

Xstrata Coal is based in Sydney, and is controlled by Switzerland-based-based resources giant Xstrata.

Ref : http://www.news.com.au

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