The workforce reduction will officially fall from 397 to 246 – a cut of 151 jobs.

However, Solid said the mine had 38 roles “vacant” so the decision resulted in 113 redundancies.

The long-expected cutbacks follow the plunge in coking coal prices with spot prices around $US83 a tonne.

The state-owned coal company also plans to cut six jobs from the maintenance team at its idled Spring Creek underground coal mine on the West Coast.

“A number of options for resuming mining have been investigated and Solid Energy believes there is still value in the asset,” Solid said of Spring Creek.

“While continuing to maintain the site remains the preferred option, the company believes this can be safely achieved with a smaller team and is therefore proposing that the current 14.5 full-time equivalent roles be reduced to eight roles, with six people made redundant.”

Overall the total cuts are expected to save Solid $NZ36 million per year.

While Solid is losing money and has more than $300 million of debt, New Zealand Labour parliamentarian and former mining union chief Andrew Little tells ICN the company survived a similar situation in the coal price-plunged 1990s.

He said the government tried to sell Solid back then, couldn’t find a buyer, held on to it and then the company took off during the later coal boom.

“The government has gone off the idea of trying to sell it – it won’t get anything for it,” he said.

While noting it was hard to predict the future of Solid over the long term, Little said the government was forced to keep Solid going.