280 Xstrata coal jobs go as mines scale back

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31 Jul 2009

DESPITE reopening a Queensland coking coal mine earlier this week, Swiss miner Xstrata has dashed hopes of an end to recent mine job cuts, announcing plans to slash 280 workers after a review of its NSW coal operations. Xstrata said it would cut jobs at its Tahmoor coking coal mine southwest of Sydney and the Ulan thermal coal mine near Mudgee "to enhance efficiencies and align employees with anticipated operating requirements in response to current market conditions".
While Xstrata made a pointed reference to operating requirements and market conditions, there are no plans to cut production at either mine.
Tahmoor, which was bought from Centennial Coal in September 2007, is making a loss at current prices, with costs pressured by a rising Australian dollar.
The mine is being scaled back to a five-day-a-week operation, from which Xstrata believes it can still produce the 2 million tonnes a year that is being produced now. It will cut 101 employees and 57 contractors, leaving a workforce of 335.
The long-underperforming mine, which employs mostly Tahmoor locals, operated at current levels while Xstrata cut Queensland jobs earlier in the year.
The cuts are in contrast to the recent actions of other coalminers, whose quarterly reports this year have spoken of improving Asian demand and production ramp-ups.
Felix Resources announced yesterday it was pushing ahead with its Moolarben thermal coal development, which is next to Ulan and will more than double Felix's coal tonnage. The company also said it was well-placed to "supply new markets while meeting demand from our existing (coking coal) customers as their production profile increases with the economic upturn which seems to be occurring in Asia".
Xstrata revealed last week it would reopen its Oaky 1 underground coking coal mine in Queensland.
Apparently, the high ash coal at Tahmoor is not being chased as hard by China as the premium coking coal of Oaky Creek.
At Ulan, demand and pricing is being painted as less of a problem than at Tahmoor.
Xstrata will slice 94 contractors and 28 permanent employees from its books at Ulan.

Source: The Australian