2009: The coal stories that counted

INTERNATIONAL Longwall News looks at the big coal stories for the first quarter of 2009, distinguished by the slashing of jobs and closure of mines.
2009: The coal stories that counted 2009: The coal stories that counted 2009: The coal stories that counted 2009: The coal stories that counted 2009: The coal stories that counted

 

Angie Tomlinson

January

The start of the year was marred with job cuts as big miners tightened their belts and slashed jobs. Queensland was particularly hard hit as coking coal mines started to feel the aftershocks of plummeting steel demand.

The consultation process between Xstrata Coal and the Construction, Forestry, Mining and Energy Union ended in January with Xstrata cutting 230 jobs at the Oaky No. 1 longwall mine.

Xstrata’s news was quickly followed by BHP Billiton which announced it would sack 1100 workers from its metallurgical coal mines as it moved to cut output.

As BHP’s news emerged, the Queensland Resources Council quickly adjusted its predictions of job losses after initially believing the state’s resource diversity would help shield its economy.

“In the space of one day, our estimate of job losses in mining and minerals processing in Queensland has jumped from 1250 to 2650, with no hint of tolerance from a recession now entrenched in our major markets,” QRC chief executive Michael Roche said at the time.

Rio Tinto also jumped in, slashing 50 full-time contractor jobs and 15% of production at its Kestrel longwall in Queensland’s Bowen Basin.

Peabody Energy said it would slash jobs and output at both its Australian and US operations.

The big miner cut its 2009 expected output by 2 million tonnes in Australia and 10Mt in the US from its Powder River Basin mines. It wasn’t the first of Peabody’s cuts, with further reductions announced in April.

Also in the US, Consol made plans to close its Mine 84 complex in Pennsylvania due to a drop in coal prices.

One of the divisions hardest hit by the global financial crisis was the coal mining contractors, and none more so than Bounty Mining.

Bounty’s woes began in earnest in January when it lost the Aquila contract which created a domino effect for the miner when it entered voluntary administration in August.

The company’s creditors have since executed a deed of company arrangement, handing the contractor back to its directors and releasing it from voluntary administration.

February

February was scarred by two coal mine fatalities – a vehicle accident at BHP Billiton Mitsubishi Alliance’s Blackwater open cut coal and a truck accident at Xstrata Coal’s Ravensworth longwall mine.

The axe continued to fall with Anglo American announcing it would cull 19,000 jobs worldwide.

Foundation Coal announced it would idle three West Virginia mines at its Laurel Creek complex.

Amid all the bad news Rio Tinto defied the trend, stating it would continue with a $US991 million expansion of the Kestrel mine.

On the technology front, Eickhoff joined the growing list of original equipment manufacturers signing a licensing agreement for CSIRO's LASC automation.

The OEM has been one of the first to deploy the technology commercially with its Carborough Downs installation.

February was the beginning of the tug of war between Gloucester, Whitehaven and Noble with news Gloucester Coal and Whitehaven Coal planned to merge.

Three months later, Noble was the eventual victor in the battle for Gloucester.

March

The toll of the global financial crisis on coal prices emerged in March with news BMA had settled its coking coal contract with Nippon Steel for up to 62% less than 2008, while Xstrata and Rio were down 44% with buyer Chubu Electric.

The carnage continued on the job front with Anglo Coal Australia cutting 650 positions across all operations, including 120 non-voluntary redundancies and 470 contractor losses.

BMA cut 400 contractor positions from its Goonyella Riverside and Norwich Park mines.

On a more positive note, a couple of big deals were announced in March with Peabody inking $US6 billion in long-term coal supply contracts for its developing Bear Run mine in Indiana.

Rio also flagged the sale of its Jacobs Ranch mine in Wyoming’s Powder River Basin for $US761 million to major American producer Arch Coal.

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