Solid Energy is to cut up to 460 jobs as it restructures its business to cope with the global downturn in coal sales.
The company is cutting staff numbers at its Spring Creek underground coal mine near Greymouth, on the West Coast, from 254 to 20 and laying off 130 contractors.
At a media briefing on Monday afternoon, Solid Energy also announced more than half of the 313 jobs at its Christchurch head office will go.
The company confirmed job losses at Huntly East underground mine in the Waikato, with the work force reduced from 234 positions to 171.
If all the cuts go ahead, the company's staff will reduce by about a quarter overall, down to 1,360 compared to 1,800 at the beginning of the year.
There will now be a period of consultation with staff, who will remain on full pay, before anything is finalised.
Last year, the company posted a $40 million loss, with a forecast $200 million hit on earnings this year.
At Monday's announcement, Solid Energy's chairman Mark Ford shrugged off questions about the part-privatisation of the company, saying it's a matter for the Government.
The Government's assets sales programme would see 49% of state-owned Solid Energy and three state-owned electricity generators and retailers sold.
A Spring Creek miner, Darryl Sweetman, was one of about 300 who were spoken to by the company's chief executive, Don Elder.
Mr Sweetman says he and his colleagues are dumbfounded and did well to keep their tempers in check.