Miner into administration
Future of 250 workers in doubt as miner assesses flood damage.
Wednesday 17 May 2017
Struggling Chinese-controlled miner Caledon Coal has called in the administrator's less than three months after the company’s only operating coal mine - Cook Colliery near Blackwater - was flooded.
In a statement, Grant Sparks from PPB Advisory said Cook Colliery would now go into care and maintenance, while they looked at whether Caledon was viable.
“PPB Advisory is currently undertaking an urgent review of Caledon and will work with stakeholders to assess the current position of the company and opportunities to restructure the business for the
future,” he said.
“Following our appointment as Administrators, our primary focus is to work with all stakeholders to assess the business and explore all options to restructure the business for the future.”
For the 70 employees who were stood down by Caledon after the flood event, the decision means they will remain out of work, and it’s unclear whether they could be re-employed if Caledon and its creditors allow the business to emerge from Administration and continue trading.
If they can’t agree, Caledon will be liquidated, and the assets sold, meaning the end of the line for all of Caledon’s 250 employees, although Caledon said previously they would receive all their entitlements.
In its most recent update, Caledon appeared to be moving forward at Cook Colliery, saying they had successfully drained the flooded Longwall and had established safe access through both the main gate and tailgate roadways.
They also used the opportunity to reject claims by the CFMEU that management at the mine new about nearby water sources.
“Cook Colliery protocols to prevent an event of this nature were implemented prior to the commencement of longwall production,” they said.
“This included drilling to confirm the location of old mine workings, the drainage of water from these drill holes, routine water monitoring, establishment of a precautionary control zones, inspections to identify inundation warning signs, training of coal mine workers, and the installation of dewatering facilities.
“Historical mine records showed no flooded upper seam workings immediately above or adjacent to the current longwall panel.”
Cook Colliery has always been Caledon’s plan B mining operation and acted as a stop gap while they tried to get the nearby Minyango coal tenements out of the ground.
Caledon got a mining lease for MInyango late in 2015. However, that project has been on the back burner because of low coal prices.
Caledon CEO Peter Trout told Shift Miner twelve months ago; he wasn’t expecting any big changes soon.
“We see an uptick in the coal market, but I think it’s unlikely to be sustained throughout the remainder of this year,” Mr Trout said in May 2016
“The recent rally of the spot price was driven by shortages due to wet weather and maintenance, but ultimately demand for steel continues to be soft reflecting the global economy.”
Caledon is 100% owned by the Chinese state-owned investment group Guangdong Rising Assets Management (GRAM), who acquired Caledon in August 2011.The first meeting of creditors is due to take place on 24 May 2017.