Peabody Energy has announced it will scale back it's underground mining at their Wambo mine complex near Warkworth
In late May the company announced the temporary closure of their Wambo underground mine citing falling global demand for thermal coal.
With COVID-19 restrictions across the world impacting economic activity, in particular energy demand from manufacturers, there has been reduced sales for thermal coal.
Since hitting a high price of $US120/tonne in mid 2018 thermal coal prices for the higher quality 6000kcal/kg have slumped to $US50/t.
It was back in the last coal price slump of 2014/15 that workers in the underground mine were faced with job losses.
Peabody Energy released the following statement tonight:
Due to incredibly challenging market conditions caused by the global COVID-19 pandemic Peabody has made the decision to scale back production at our Wambo Underground Mine, resulting in a reduction of the workforce.
Today mine managers began open and respectful consultation with our employees. We expect to retain approximately half our workforce following the consultation period.
Where possible affected employees will be offered roles at Peabody's other operations.
The decision to ramp down production at the mine has not been taken lightly and Peabody very much regrets the impact this action will have on our loyal employees, their families and the community.
We commit that all affected employees will receive full redundancy entitlements, outplacement assistance and counselling to help them and their families adjust to this difficult news.
We will continue to monitor market conditions and the performance of the mine, while we undertake further study of the reserves including South Wambo.
This announcement does not impact the mine's open cut operations.
The world's largest thermal coal exporter Glencore announced ten days ago they would be cutting production by 7 million tonnes resulting in shutdowns at their Hunter sites and it is believed they will no longer have weekend production at their underground mine Integra.
The Australian owned Bloomfield group, owners of the Rix's Creek Mine near Singleton, have also applied for the Federal Government's Jobkeeper wage subsidy.
In a statement released tonight by the Federal member for Hunter Joel Fitzgibbon says a number of companies have, or are about to, announce production cutbacks and workforce stand-downs.
"The coal mining industry is the backbone of the Hunter's economy and we will all feel the impacts if production curtailments continue. I urge coal companies to do everything possible to keep people employed," he says.
"In Canberra next week I'll have discussions with Ministers to highlight our challenges and to discuss possible responses.
"I will also take every chance to call-out anti-coal activists who display a hint of vindication in our current challenges and pain.
"Coal has a bright future, but it's suffering the consequences of the pandemic, like so many other industries. People adversely affected don't need activists rejoicing in false and misplaced vindication."