Mass job losses at Hunter Valley mine as industry reacts to plummeting thermal coal price
Workers at Peabody Energy’s Wambo Underground Mine in the New South Wales Upper Hunter Valley face an uncertain future.
The company has announced plans to halve the site’s workforce and drastically scale back production.
The US miner, which has , is attributing the decision to the “incredibly challenging market conditions caused by the global COVID-19 pandemic.”
The job losses come after an eight-week partial suspension of operations that commenced in mid-June.
At the time, the company said the “proactive steps” were designed to “protect the long-term sustainability” of the mine.
The Northern District Hunter-based president of the CFMEU, Peter Jordan, said the announcement was disappointing, but not surprising.
“All of our members took appropriate leave during that period and we have a sneaking suspicion that Peabody haven’t been entirely honest with their workers,” he said.
“It just seems so funny that we have eight weeks off the job, at their request, for a forced shutdown, return after the eight weeks and within days get confronted with the situation of 50 per cent of the workforce losing their jobs.
“There’s a bit of anger out there at the Wambo mine about how Peabody’s managing this current situation.”
While 75 union members face losing their permanent positions at the site, it is understood that as many as 150 workers could be impacted.
In a statement, Peabody said consultations with employees were now underway.
“We commit that all affected employees will receive full redundancy entitlements, employee assistance and counselling to help them and their families adjust to this difficult news,” the company said.
“The decision to ramp down production at the mine has not been taken lightly and Peabody very much regrets the impact this action will have on our loyal employees, their families and the community.”
“We will continue to monitor market conditions and the performance of the mine while we undertake further study of the reserves, including South Wambo.
“Where possible affected employees will be offered roles at Peabody’s other operations.”
But with demand for thermal coal exports decreasing, Mr Jordan said that was unlikely.
“The ability of these workers to be able to find other jobs at the moment are very remote,” he said.
“The company is saying that there’s opportunities for redeployment.
“Well, let me tell you, there’s not too many jobs for redeployment whatsoever — you could count them on one hand.”
Sliding price felt across Valley
Peabody is not the only miner in the region to rethink its production plans as thermal coal prices drop.
Prices have fallen to an average of $60-$70 a metric tonne from nearly $100 at the start of the year.
Earlier this month, Glencore announced a suite of temporary site and equipment shutdowns across its Hunter Valley mines in response to the global market environment.
“These measures will enable us to align our production levels with market demand, while providing the flexibility to ramp back up as economies recover from the effects of COVID-19,” the company said in a statement.
“Where temporary shutdowns are necessary, these are planned to coincide with the September school holidays.
“Workers will be required to take leave during this time.”
Meanwhile, BHP confirmed its intention to offload its Mount Arthur open cut mine, near Muswellbrook.
Federal Hunter MP, Joel Fitzgibbon, said he believed the coal industry had a long-term future in the region despite the downturn.
“Beyond the COVID-19 crisis, things will be fine,” he said.
“But how long demand will be depressed in those Asian markets, we do not know.
“I’ve no doubt that Mount Arthur will be picked up by another player — who knows which.
“I fear we are now just getting a small taste of what it would be like in the Hunter Valley without our coal mining industry.
“I just appeal to the companies to hang on as long as they can, to do the right thing by the employees, and I’ll pray that we can hang on long enough to wait for that demand to grow strong again.”