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Projects ramp up despite downturn

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Despite widespread job losses and reports the mining sector is on a downward trend, new projects are coming online.

Rio Tinto’s $2.1 billion Kestrel mine expansion located 40 kilometres north east of Emerald in central Queensland recently delivered its first coal load; sparking criticism Queensland’s mining companies are overreacting when slashing thousands of jobs.

The extension will add an extra 20 years mine life to the underground coal operation and is expected to reach full capacity by the end of 2014, producing 5.7 million tonnes per annum.

"Over the coming year and a half we'll see a gradual transition of production as our existing operation, known as Kestrel North, winds down and the new Kestrel South operation ramps up,” Kestrel Mine general manager operations John Coughlan said

The expansion included the construction of a new longwall, 7.9 kilometres of overland conveyor and upgrades to the existing coal handling and preparation plant.

Construction, Forestry, Mining and Electrical Union district vice president Stephen Smyth said new mining projects are still coming online despite the downturn.

"The industry isn't as bad as what people are making out," he said.

Smyth said mining heads have mismanaged operations during the boom, not taking into account the industry’s cyclical nature.

"Some of these mines have laid off fulltime workers and then brought them back on as... contractors.

"I think companies are doing it to cut entitlements of fulltime workers."

But with high labour costs and falling commodity prices Queensland Resources Council director Michael Roche said Australia’s coal sector is now facing the worst conditions in over a decade.

"The coal industry is oversupplied and it's going to take a couple of years to work through that," he said.

The Australian Coal Association estimates over 9000 jobs have been cut from NSW and Queensland’s coal sectors in the past 15 months and at the end of June over 1000 jobs were axed from QLD coal operations in just a week.

GlencoreXstrata said it would slash 450 workers from its Newlands and Oaky Creek coalmines in the Bowen Basin and in the same week cut 46 workers at its Ravensworth mine in the Hunter Valley.

Downer announced it was slashing 185 jobs from BMA’s Goonyella Riverside coal mine in Moranbah.

A spokesperson told Australian Mining BMA had advised the mine service contract company they planned to absorb a quarter of pre-strip work at the mine.

Peabody Energy announced it is slashing over 400 contractor jobs across its coal mines in a bid to conduct a ‘repositioning and improvement program’ to reduce costs.

Hastings Deering axed 200 jobs across its Rockhampton and Mackay sites, attributing it to the mining slowdown.

CFMEU mining and energy vice president Steve Pierce said the companies had wasted billions of dollars with workers bearing the brunt.

“In the past 12 months, we have seen failed takeovers, we have seen attempted buy-outs of businesses that have been economic disasters and we have seen mergers that failed and cost the companies billions of dollars,” Pierce said.

He said the job cuts come as companies make ‘billions’ in profits, instead of the ‘multi-billions’ they predicted.

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