Coal news and updates

Engineering group RCR Tomlinson is dumping most of its coal mining services businesses and expanding into renewable energy and transport services, claiming its coal businesses are no longer profitable.

The Perth-based group will close 12 unprofitable businesses exposed to coal mining services, the company said on Monday after announcing a restructure following a strategic review.

"The Australian coal industry has suffered significantly over the past five years with low profitability and capital investment," RCR said.  

"The continued pressure on service providers to reduce pricing is unsustainable and provision of services is unlikely to return a profitable business in the forseeable future."

 

RCR, which has specialised in providing engineering services to the energy, transport and resources industries, will cut more than 100 jobs after combining some of its Australian and New Zealand operations and closing down fabrication workshops as well as coal services businesses.

But the company said it remained committed to providing services to iron ore, gold, base metals and mineral sands customers, and would strengthen its renewable energy and transport operations.

"The significant increase in available capital for renewable energy projects, supported by Renewable Energy Targets and Australian Renewable Energy Agency funding, have provided a major pipeline of projects in this sector," RCR said.

RCR Tomlinson won a design and engineering contract in March to help develop Origin Energy's proposed solar farm in Queensland's Darling Downs.

It will also target opportunities in road and rail tunnel engineering. 

RCR will take a $35 million charge in 2015-2016 for the business shutdowns, which include operations in Hong Kong and India, and an additional $7 million redundancy charge.

But it said the changes would save it some $12 million annually.

RCR's stock, which has re-opened for trading after being halted on Thursday, dropped 5¢ in midday trading on Monday to $1.74. The stock is down 23 per cent over the past 12 months.