31 Aug 2012

Warning for mine workers hoping for Australian jobs

9:05 am on 31 August 2012

Solid Energy workers in New Zealand are not waiting for the outcome of a review of their jobs and are looking for work - but an Australian mining analyst is also warning of tough times across the Tasman.

Faced with plummeting international coal prices, Solid Energy is cancelling or postponing most of its development and capital investments to save $100 million.

It has suspended operations at Spring Creek, near Greymouth, and told 240 workers it is considering mothballing the mine. About 130 contractors also work at the mine.

The state-owned company said on Wednesday that at least 140 jobs must go at its Huntly East mine in Waikato and its head office.

It plans to cut some 62 positions at Huntly East and will stop work on on a new ventilation shaft at the mine, affecting 60 outside contracting jobs.

The Engineering, Printing and Manufacturing Union believes job losses will accelerate the loss of expert mine workers to Australia.

Jason Walker, head of recruitment firm Hays, says Solid Energy miners are already looking for work. He says he hopes to find local jobs for workers, but admits some may look for jobs across the Tasman.

But Australian mining companies are also under pressure from falling prices caused by a slump in demand from China and years of inflation-busting wage rises.

The industry has been thrown into further turmoil by BHP Billiton's decision last week to shelve its plan to expand the massive Olympic Dam copper and uranium mine in South Australia.

Sydney-based resources analyst David Lennox says miners are trimming budgets where they can, including reviewing expansion plans and the costs of running existing mines.

Mr Lennox says labour-saving measures miners are now looking at include remote control trucks. He says multinationals like BHP are also looking at mines in Asia and Latin America that will be cheaper to develop because of lower wages.

The head of the miners' union in Australia, Tony Maher, says there is always demand for experienced mine workers but some companies are using so-called skill shortages to bring in overseas workers on poorer pay and conditions.

An EPMU organiser at the Huntly East mine, Ray Urquhart, says the union has been working hard to improve conditions and stop the loss of talent to Australia, but the job cut move by Solid Energy leaves many miners with no choice.

He says the losses are much worse than anyone expected and redundancies could cripple the industry in the long term.

Solid Energy chief executive Don Elder admits there is a risk the company, which already has a 20% annual staff turnover, could lose more experienced workers, but says it has to restructure to survive.

Government urged to step in

Grey District mayor Tony Kokshoorn is calling for Government intervention over the possible closure of the Spring Creek mine.

Mr Kokshoorn told Radio New Zealand's Morning Report programme the Government needs to step in, or more workers will be lost to Australia.

"The board and (Finance Minister) Bill English need to get together, recapitalise the Spring Creek development so that they can reap those benefits, otherwise we're only going to lift the gross domestic product of Australia by sending another group of miners to work over there."

Prime Minister John Key says he respects Solid Energy's decision to suspend operations at Spring Creek. He says the mine is a significant coal resource and employs a lot of people but, in the end, Solid Energy has a right to make its own decisions.

"Obviously from the Government's point of view, it would be great if the mine could remain open and in operation and we're just pleased that they're taking an interim step to really fully consider what could happen."

'Too risky' to work at Spring Creek

Solid Energy says it is too risky for its Spring Creek workers to go underground until the mine's future is decided.

A spokesperson for the company says it has decided it is too dangerous to let miners go underground while they show clear stress from the uncertainty about the mine's future. The only work continuing at the site will be about 20 workers doing ventilation, monitoring and some coal loading above ground.

The miners' union, the EMPU, says stopping workers from working in the mine might be the right decision.

Spokesperson Garth Elliot told Radio New Zealand's Checkpoint programme that Solid Energy has not yet told it that work won't be resuming on Monday but, as miners are suspended on full pay, it might be safer to keep them out.

"Maybe the risk assessment has brought out that a lot of the men do feel that they're not capable of actually going back down underground knowing what they know in regards to the future of the mine. So maybe that's why they've decided to make a statement like they have."

Mr Elliot says the company has told him the review might take two weeks or longer.

Meanwhile, a West Coast contractor says the downsizing or closure of the Spring Creek mine would be devastating for many businesses, already hit by the Pike River mine disaster.

Bus company owner Cliff Sandrey says this would be the end of the line for many of the 130 contractors working there. He says his company employs 10 people and gets three-quarters of its income from the mine.

Greymouth Business and Promotion Association chair Kerri Miedema says the town is already suffering from a drop-off in tourist numbers, but it will survive and business owners will adapt to whatever happens.