Coal news and updates

More than 400 jobs at a central Queensland coal mine are at risk after BHP Billiton scrapped a contract for preliminary work on a new mine pit at the Goonyella mine.

 

The contract company Downer EDI said the decision would cost it about $360 million, but it was unsure what would happen to the affected workers because it had only been informed last night.

 

BHP Billiton’s BMA joint venture scrapped a contract with Downer EDI for what is known as the pre-strip at its BMA Goonyella Riverside coal mining operation. The work removes the overburden to allow for mining.

 

BHP Billiton coal president Dean Dalla Vale said the move was a continuation of cost reduction and productivity enhancement measures that have been underway at BMA for more than 18 months.

 

“The termination of contractual arrangements for pre-strip work at the BMA Goonyella Riverside mine involving the removal of around 427 contractors from the mine is a further measure to ensure the long term viability of BHP Billiton’s coal business,” he said.

 

“BHP Billiton Coal acted early to reduce costs and improve productivity with the closure of unproductive capacity at Norwich Park and Gregory mines in 2012 and widespread cost reduction measures across all operations over the past 18 months.

 

“Every operation has implemented productivity plans, which have resulted in record production at a number of mines.

 

“Further measures to address wage and other costs are being undertaken at all mines in Queensland and NSW as we continue our detailed reviews of every aspect of our coal operations to ensure every operation remains operating cash positive.

 

“The coal industry is undergoing a difficult transition and to be globally competitive we have to reset the cost base of the business. This will continue to play out over the near term and coal producers face challenging decisions to find the necessary step changes to create value for shareholders.”

 

BMA will continue to review all aspects of its operations to ensure that all mines operate as productively and cost competitively as possible.

 

The decision will come as a massive blow to Downer EDI which yesterday said the cost would be about $360 million.

 

 

Source: http://www.couriermail.com.au/