Citing an “extreme downturn” and “difficult market conditions”, the New Zealand miner proposed cutting its total workforce to 1360, compared with 1800 at the beginning of the year.
Solid said it expected a revenue shortfall of more than $NZ200 million in the financial year.
Corporate, support services and development staff will be reduced by 50% from 313 to 150 jobs, while Spring Creek and Huntly East are planned to lose hundreds of mining and contractor positions.
On the same day that Solid’s union miners planned their march on Parliament to plea for mine-saving funding from the government, the company proposed slicing Spring Creek workers from about 254 to 32 and Huntly East positions from 234 to 171.
An additional 130 people employed at Spring Creek as contractors are also expected to be affected.
Solid says Spring Creek has lost more than $100 million since being set up in 2007 and has cost the company $50 million since the end of 2011.
“In recent years the mine has performed below expectations as a result of more complex geology being encountered, higher costs and slower development progress,” Solid chairman Mark Ford said.
“The mine has also struggled to meet the company’s and wider public expectations about operating safely.”
A plan drafted between Spring Creek management and workers has outlined a path to keep the mine going with just $36 million of further investment, but Solid said it found “all variations of the mine plan” to be uneconomic under reasonable price expectations.
Huntly East’s 27% workforce cutback will reduce normal production to five days a week and necessitate a new supply agreement with the mine’s principal customer, New Zealand Steel.
“We think that by reducing the workforce numbers we will be able to make the operation more cost-effective and give it a better opportunity for a long-term future,” Solid coal operations manager Larry Hull said.
“We will do all we can to assist staff made redundant as a result of these changes.”
Cost and production cuts will also be implemented at the company’s Stockton open cast on the Southern Island’s west coast.
Capital expenditures will be reduced by $100 million in the 2013 financial year by cancelling or postponing most of the company’s investments and development programs.
Solid said it also intended to sell or close its biodiesel business and move for an earlier shut-down of its underground coal gasification pilot.
Last month, Solid reported a $40 million net loss for 2011-12, with a 16% increase in earnings offset by asset impairments and other write-downs totalling $140 million.
