Curragh doing another headcount
MINER planning more strategic reviews in wake of $360 million loss at mine.
Thursday 25 August 2016
It seems likely that further jobs will be lost at Curragh mine near Blackwater following the company's announcement yesterday that it will start delivering on the findings of an expert panel review into costs and productivity at the mine.
Also in light of the $310 million loss it announced yesterday, it says it will continue to “review strategic options to maximise shareholder value” as it looks to find its way back to profitability.
If the job losses materialise - and Wesfarmers have not confirmed they will - it will be a bitter pill to swallow for the mines employee’s given they reduced costs per unit a further 3 percent in the last 12 months and per unit costs have fallen by more than 30 percent since 2012.
The biggest problem for Curragh was some time lost to wet weather over Christmas and that there was a 30 percent reduction in overburden removal and a 25 percent reduction in coal production at the end of 2015 as the company brought forward planned maintenance including a critical power upgrade to the coal crushing facilities.
However, other issues played a big role as well.
Firstly, the mine was configured to target the wrong coal types meaning there were some “mine sequencing” issues, and secondly, someone in head office forward sold coal at a fixed price and currency which ended up costing them $147 million last financial year and will cost about $90 million next year.
Wesfarmers CEO Richard Goyder says they will continue to look for ways to cut costs.
“The outlook remains challenged in the short-term,” he said.
“In resources, we will seek further cost structure reductions, with revenue subject to commodity price & exchange rate volatility.”
However longer term, the board of Wesfarmers appears to remain optimistic about the future of Curragh, announcing it still pushing ahead with expansion plans.
So far they have a mining lease approved with state government approval, but they are still waiting on federal government approval.