Wednesday 8th May 2013
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Solid Energy says it will cut 105 jobs, adding to 440 already shed as the unprofitable state-owned coal miner shrinks its focus back to coal after piling on debt as part of a grandiose expansion strategy.
Solid Energy has been in talks with its banks and Treasury officials as part of a wide-ranging review of the business, which posted a $40 million loss last year, mothballed its Spring Creek mine and dropped or put up for sale a range of projects including plans to turn lignite into diesel. Chief executive Don Elder left in February, following most of the board.
Chairman Mark Ford said the company is in talks with 234 workers based in or reporting to its main Christchurch office about its plan to whittle their number down to 129.
Ford said the company expects to confirm its business model and strategy by the end of June.
"The proposal for a new corporate office structure is designed to support a refocused coal mining business which is appropriate for a coal company with our turnover, is consistent with others of a similar size in our sector and which is affordable for the business," he said.
"We have already cut some of our activities and operations and are divesting other parts of the business, as well as surplus assets" including the Nature's Flame wood pellet business which will go on sale shortly, he said.
The company's underground coal gasification and lignite conversion projects "still have potential" but Solid Energy "is no longer in a position to be the lead sponsor of major capital projects and we are looking to transition and divest these projects."
The company's indebtedness and difficult financial situation means it is unlikely to undertake any significant new coal development projects," he said.
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