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Anglo American to cut jobs, roster at Drayton thermal coal mine in Australia

Anglo American is to move approximately 500 employees at its Drayton export thermal coal mine in the Australian state of New South Wales to a shorter five-day working week from July 1 with some resulting job losses, the company confirmed Thursday.

Drayton mine currently operates a seven-day roster and is due to exhaust its coal reserves next year with the prospect of closure. However, the coal producer has plans to start a new open-cut mine -- Drayton South -- next to Drayton to prolong coal mining at the site in the Hunter Valley coal field.

"We have not specified a number for jobs, as we are still working through the changes with our employees," said a Brisbane-based company spokeswoman in an emailed response Thursday to questions about the scale of potential job losses at Drayton.

Clarence Robertson, general manager for the Drayton mine, said in a company statement Tuesday that the roster change was unavoidable because of delays to approvals for the company's Drayton South project.

"We have faced more than six months of delays as a result of the prolonged approval process so far, and during this time coal prices have fallen and costs have increased," he said.

Drayton South is a project to extract up to 7 million mt/year of coal from the site over a 27-year period.

Anglo American suffered a setback in December, when the New South Wales government's Planning Assessment Commission issued a report that stated it had decided not to approve the development plan for Drayton South.

The planning commission acted after receiving objections from horse studs and equine farms and vineyards which surround the proposed mining area, and Anglo American was asked to devise a new mining plan for Drayton South to mitigate its impact on local landowners.

"We have lodged our detailed response to the PAC's conclusions with the department of planning, and we continue our efforts to secure the necessary project approval without further delay," added Robertson.

In its December report, the PAC said Anglo American had offered to amend its mine plan for Drayton South to leave 35% of the project's coal reserves in the ground, approximately 53 million mt, in order to maintain a buffer between the mine and nearby horse stud farms, but this was not deemed acceptable.

The existing Drayton mine is 88.1% owned by Anglo American and is an open-cut operation that produces 5 million mt/year of thermal coal, all of which is exported to customers in Asia including Japanese power plants.

Japanese and South Korean companies, including Mitsui Coal and Hyundai, own Drayton mine's remaining 11.8% equity, and the mine is Anglo American's only operation for thermal coal in New South Wales.

Anglo American has one thermal coal mine at Callide, Queensland, which supplies product to power stations in the Gladstone area and continues to operate normally, according to the company's website.

Source: Platts