Christmas lay-offs to hurt contractors

CHRISTMAS will be less happy for scores of New South Wales mine contractors who are expected to be laid off over the break at Yancoal and Vale’s coal mines.
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Gloucester Coal's Duralie mine.

Lou Caruana

While full time employees will be forced to have leave, mine contractors are expected to be told their services are not required over the festive season.

Brazilian giant Vale is also seeking to cut shifts at its Integra open-cut mine in the Hunter Valley.

A Vale spokesperson told ILN:“In light of current market conditions and the need to maintain a competitive cost position, Vale will move the Integra open cut mine from a seven day operation to a five day operation, commencing 2 January 2013.

"Accordingly, resourcing requirements at the Integra open cut operation have been reviewed and some roles will be rationalised to deliver business efficiencies that align with a five day roster.

“Mine management has openly consulted with the workforce and their representatives on this matter and is committed to minimising the impact on employees and supporting them through the transition process.

“Five day operation has delivered positive results for Integra in the past and mine management considers it to be in the best long-term interests of the operation and its employees.”

Yancoal’s Duralie and Stratford mines near Gloucester in NSW are likely to close for two weeks over the Christmas and new year period after the company reported a $53 million loss in the September quarter.

Yancoal may have to reschedule production at its seven mines after a 6% plunge in sales in the September quarter left it with too much stockpiled coal.

The company is also facing a financial hit this quarter because it can’t use its rail and port allocation and is unable to find other coal producers which can take it up.

Sales of all coal types have been impacted by the market downturn with the lower quality metallurgical coal bearing the brunt of the weak markets.

A significant amount of this coal is being sold into the thermal market on an energy adjusted basis at a price lower than would be achieved if the coal was sold as a metallurgical product.

“The market outlook remains uncertain despite coal production cuts in several countries, a restocking phase in China at steel mills and higher gas prices in the United States,” Yancoal said.

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