Job cuts at Vale

BRAZILIAN giant Vale is believed to be the latest coal mining company to cut jobs in Queensland with about 30 employees in its Brisbane head office reportedly told on Friday that they would be made redundant.
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Carborough Downs, image courtesy of Vale.

Lou Caruana

The company, which has seen production from its Carborough Downs mine in the Bowen Basin cut because of a gas scare in May, is believed to have been struggling under the tough operating conditions experienced across the industry.

“Vale gave notice to around 30 people – positions ranging from admin assistant to GM level – last Friday and reportedly there are a few more rounds to come,” a source close to the company told ILN.

A spokesman from Vale would not comment on the reports.

“It’s company policy not to comment on speculation relating to staff movements,” he told ILN.

The staff cuts seem modest compared to the 600 announced by Xstrata and 300 by the BHP Billiton Mitsubishi Alliance as part of the mothballing of the Gregory mine this week.

Xstrata blamed low coal prices, high input costs and a strong Australian dollar against the US dollar for an ongoing review of its business in Australia.

BMA said it would stop producing at its Gregory open-cut mine from 10 October 2012 after a continuing operational review of its Gregory Crinum operations found that the open-cut mine production was no longer profitable in the current economic environment of falling prices, high costs and a strong Australian dollar.

Vale has begun gradually normalising metallurgical coal production at its Carborough Downs longwall after a gas leak problem in May cut production rates at the mine by 75%.

The phased resumption of safe production rates follows the Brazilian miner’s decision to lift the declaration of force majeure which suspended contractual obligations at the Bowen Basin mine due to an unexpected and extenuating circumstance.

As reported in ILN, the mine had thought it had a gas and heating emergency under control and was gearing up to return to full production after dangerous gas levels led to a directive by the Queensland mines inspectorate to halt production on May 29.

The company declared force majeure two days later. No employees were injured and no environmental damage was reported.

Stoppages related to high CO2 levels resulted in a 75% year-on-year plummet in second quarter production at the operation. Second quarter production totalled only 82,000 tonnes compared to 325,000t in the first quarter.

Vale said that a gradual return to normal production rates and resumption of client deliveries would follow resolution of remaining “operational and geological issues” related to the closure.

The mine is enacting strategies to lower the oxygen content in the goaf to minimise any potential further temperature rise and potential ignition of methane. This includes bulldozing cracks on the surface of the mine above the longwall panel.