Last November, Centennial responded to the industry downturn by deciding to place its Mannering and Airly mines in NSW on “care and maintenance” from January, resulting in about 40 job losses across the group. It also deferred a drivage contract at its Newstan colliery.
“Like most other companies in the mining industry, Centennial Coal has continued to review its business operations in response to the ongoing economic downturn in the sector,” the company said in a statement.
“While the current economic downturn to some extent reflects the traditional cyclical nature of the mining business, the boom-driven growth in commodities over the past few years has burdened the industry with record high production costs.
“This, combined with the weak US dollar export thermal coal price and an Australian dollar that has remained stubbornly high, continues to impact the group’s competitiveness.”
Over the past 12 months, Centennial had worked toward reducing production costs and increasing productivity, it said.
While improvements have been achieved, the continuing strength of the Australian dollar combined with weak thermal coal prices continues to have a material impact on business profitability.
“Unfortunately, as there are few signs of an immediate improvement and following the conclusion of a business review of all operations, further cost reductions will have to be made in order for Centennial to sustain its business and be competitive under current market conditions,” it said.
“While costs reductions will continue to be pursued through our suppliers and further production efficiencies, regrettably, following consultation with the workforce, Centennial has no option other than to reduce employee and contractor numbers further.
“While this decision has not been taken lightly, with every effort made to keep redundancies to an absolute minimum, it is essential to ensuring Centennial can sustain its current position in the market.”
Centennial said it was committed to diligently working through a process that would sensitively support those impacted.
