Wollongong Coal set to cut jobs as part of operational review

Wollongong Coal has flagged the need to cut more jobs, stating an operational review will result in some “tough decisions” at its two Illawarra mines.

Both the company’s Wongawilli and Russel Vale mines are in the firing line, with Wollongong Coal chairman Jasbir Singh citing the need to make the operations “more competitive”.

He said a slump in coking coal prices, which have hit a six-year low, was behind the decision.

“We are currently conducting an organisational and operational review which may result in some tough decisions,” Singh said.

“But I firmly believe the company potentially has a good future despite all these difficult market conditions and operational changes.”

Wollongong Coal’s chief operating officer David Stone said the company was in talks with employees and unions to explore all cost cutting avenues.

Stone said changes could include cuts to “manning levels” with a review expected to be completed by early June.

He said the company was awaiting a decision from the state government which would give it permission to mine 400 metres of longwall 6 at its Russell Vale mine ahead of schedule.

A major extension of the mine proposed last year would see an increase of its life by five years and a ramp up in production to 4.7 million tonnes per annum.

However the company said until a decision on that application is made, it needs permission to mine longwall 6 in the interim or faces the prospect of shutting the operation.

“While the declining price of coking coal has forced us to ensure we reduce costs, this has become vital while we await state government approvals for the continuation of longwall mining at Russell Vale to fully utilise our existing lease,” Stone said. 

Wongawilli mine will also be the subject of an operational restructure.

“This work continues as we plan for our future development of Wongawilli South, which is expected to produce up to 2 million tonnes per annum by 2018,” Stone said.

Earlier this year 47 voluntary redundancy packages were handed out by the company as it implemented plans to cuts its workforce by 20 per cent.

Wollongong Coal was formerly known as Gujarat NRE.

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