260 jobs in jeopardy after BHP axes mine contract

The CFMEU want any workers affected by BHP’s decision to axe a Leighton contract to be redeployed to other mines in the Bowen Basin.

As Australian Mining reported this week, Leighton will prematurely stop work at the Peak Downs coal mine in Queensland two years earlier than expected after BHP axed the contract.

The contractor is now scheduled to leave the mine site on July 3

BHP have instead hired HSE Mining to remove overburden at the mine site.

The decision places the jobs of 260 people employed by Leighton’s in jeopardy, The Daily Mercury reported.

Construction, Forestry, Mining, and Energy Union district vice president Stephen Smyth said it was hoped any sacked workers would be redeployed at other mine sites in the region.

"That's the agreement they're under, that's our main focus," Mr Smyth said.  

"We'll engage with Leightons to find out. We have to verify a few things and ensure the proper consultation occurs between the union and employer.  

"And the company agreement is enforced when it comes to this issue."  

A spokeswoman for BMA said increasing costs and falling commodity prices were behind the decision.

"Against a backdrop of increasing costs and falling commodity prices, BMA continues to focus on reducing its overheads and operating costs across the business," the spokeswoman said.  

"This includes reviewing contractor arrangements and making the necessary adjustments to ensure operations can remain cost competitive."

Leighton said it would be entitled to compensation for the early termination of the contract.

The company expects to lose more than $260 million of work over the next two years as a result of the decision.

Recent decisions by both Xstrata, Peabody and Yancoal to dump contractors servicing their mines has also hit the contracting industry hard.

Xstrata said it will take control of the Collinsville Coal Mine away from Thiess in 5- 6 months as it pushes for the project to turn a profit.

In a statement released by the company, Xstrata said Collinsville Mine – in central QLD – had "suffered substantial financial losses," on the back of lower coal prices, the high Australian dollar and high operational costs.

While just a day after this announcement, mining giants Peabody and Yancoal announced a joint venture agreement to take control of Middlemount mine away from service contractor NRW.

In a statement, the companies stated that because both were coal mine operators it was a ‘logical step for Middlemount Coal to become the operator of the Middlemount mine.’

Earlier this year major miners BHP Billiton and Rio Tinto both inferred they plan to cut as much as $US10 billion from operating costs over the next two years.

Image: leighton.com

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