Gregory Crinum mine north of Emerald has dropped 100 positions.
Gregory Crinum mine north of Emerald has dropped 100 positions.

Contractors on the chopping block

UP TO 170 contractors have been cut from two coal mines near Emerald.

The Central Queensland News understands 100 miners, some from Emerald-based businesses, lost their on-site jobs at BHP Billiton Mitsubishi Alliance's Gregory Crinum operation yesterday, while about 70 positions were dumped from Rio Tinto's Kestrel-KME mine.

"The Australian coal industry is facing some significant challenges, including a weakening in global prices, a high Australian dollar and increasing costs," a BMA spokeswoman said.

"Against this backdrop, BMA is reviewing costs across its entire business.

"We are focusing on reducing operating costs - particularly overheads and other discretionary expenditure - to ensure BMA's operations are well positioned on the cost curve.

"We have had to make some tough decisions, against a backdrop of a challenging economic environment, and unfortunately that has meant changes to contractor arrangements."

A Rio Tinto spokesman did not deny a number of contractors had been laid off.

"Rio Tinto Coal Australia's contractor workforce numbers vary regularly depending on needs across our operations," the spokesperson said.

"Kestrel Mine's current transition phase to its extension is an example of this varying need."

Rio is yet to reveal the depth of job cuts from its Clermont Mine.

It announced last week it would close the aging Blair Athol before year's end, leaving 140 workers to take redundancies or attempt redeployment.

 

The spot price for Australian thermal coal has fallen 36% in 18 months. Add that to a raft of other issues and the optimism of industry leaders is suffering.
The spot price for Australian thermal coal has fallen 36% in 18 months. Add that to a raft of other issues and the optimism of industry leaders is suffering.

Ensham Resources, which shed about 100 workers at its open-cut mine east of Emerald last month, was "still working through the current environment", CEO Peter Westerhuis said.

 

Mr Westerhuis said the move to an underground bord and pillar operation to prolong the life of the mine had actually created 20 positions on site.

"Ensham underground is almost fully manned and we're about 20 short of the 160 required," he said.

"Construction is now complete and we are about to ramp up production to full capacity of 1.765 million tonnes, which we hope to do by the end of the year.

"Thermal coal prices may have found a floor in the last two weeks, which gives us some hope of a very feeble recovery."

Xstrata on Monday confirmed it had laid off contractors at its coal mining operations in Australia.

A company spokesman declined to specify the number of job cuts.

Anglo American is rumoured to have taken the axe to a small number of jobs at its Foxleigh mine.

While thermal coal prices have plummeted, hard coking coal prices have dropped more than 22% to $174 a tonne from $225 at the end of June, according to data provider Platts.

 

Glencore Xstrata Plc and Sumitomo Corporation have signed an agreement to acquire Rio Tinto’s 50.1% interest in the Clermont thermal coal mine.
Glencore Xstrata Plc and Sumitomo Corporation have signed an agreement to acquire Rio Tinto’s 50.1% interest in the Clermont thermal coal mine. Peter Holt

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