150 locals not FIFO workers to benefit from Stanmore plan

FIRST in line for the 150 jobs created at a new Stanmore Coal mine will be workers from Moranbah and Mackay.

On Wednesday news broke that the Isaac Plains coal mine 6km east of Moranbah would reopen in February.

Gladstone-based Golding Contractors was awarded its contract late Wednesday afternoon and principal mining engineer Dylan Pieters said it would look to employ “those living closest to the mine”.

“To get a mining contract in this current market is a really good thing,” Mr Pieters said.

“We want to employ people where the mine is at and we’ve already started advertising some of the positions.”

But he said the bulk of the new jobs would be advertised soon, through seek.com and the company website.

Stanmore Coal’s managing director Nick Jorss said the company would not employ FIFO workers “because it did not suit the business model”, particularly with the mine on track to be one of the world’s lowest-cost metallurgical coal mines.

He planned to reduce the cost of production for each tonne of coal by around 35% compared to the mine’s previous performance.

Buying the mine for just $1 in July was a major cost-saving but Mr Jorss said it would also change its operation method.

“The model is definitely changing,” Mr Jorss said.

“We are changing the method and maximising the amount of dragline.

“Moving overburden with dragline reduces costs.”

More than $7 million in royalties, in addition to state and federal government taxes, would flow back to the state.

After the mine reopens in February Mr Jorss said the first coal shipments should leave in April, en route to Japan, Korea and Taiwan.

He hoped the mine would have a 10-year lifespan.

During that time it would set aside $32 million for the rehabilitation of the mine site.

http://www.dailymercury.com.au/news/fifo-not-part-of-firms-plan/2876997/

Low price, oversupply is coal’s double whammy

AN INDUSTRY analyst has blamed factors in addition to a low coal price for the closure of Isaac Plains Coal Mine.

CQUniversity senior lecturer in management and organisational behaviour Paul Weight said there were two reasons for yesterday’s announcement.

“One of them is certainly a drop in the coal price,” he said.

“The second one is an oversupply of coal.

“Australia isn’t the only country that produces coal. We have to compete with the coal coming out of Indonesia, South America, Siberia and more.

“If you are running a coal mine in Indonesia, for example, it costs a lot less than it does in Australia.”

Mr Weight said mining companies could have been managed better to prevent losses.

“One of the things mining houses can do better is to run their companies in a much more lean fashion,” he said, “whereby they always have an eye out on expenditure and cost.

“When companies are making a lot of money, many are bedding out and employ more people that they don’t really need.”

However, Mr Weight said there was no easy solution in economically challenging times.

“Most of the mining houses are international companies, with many mines,” he said.

“If a mine becomes uneconomical, they’ll just close it down and open it again when the coal price recovers.”

Mr Weight said there was a glut of coal in the market.

“China stockpiled coal during the financial crisis and is not buying as much now,” he said. “The value of coal is reducing. When coal cost $120 a tonne things were great, but at $85 or $90 a tonne it’s not viable.

“The bottom line is when the price of coal is less than what it costs to get it out of the ground, it’s not a viable project.”

 

Fears house prices will be hit hard

THE announcement Isaac Plains Mine in the Bowen Basin will close early next year has put property investors on edge.

Moranbah real estate agent Geoff Williams said consumer confidence in the town had dropped.

“There are a lot of investors here who are really hurting badly,” he said.

Current Moranbah house prices were similar to prices in 2004, Mr Williams said.

“The average house price is in the vicinity of $400,000 to $420,000.

“This is unusual for the last two years, but historically Moranbah house prices have always gone up and down.

“Prices were held up because there were some really good quality investments.”

News of the mine closure came just days after BMA announced it would be cutting more than 700 jobs in its Bowen Basin mines.

 

Flow-on effect in Mackay

CLOSURE of the Isaac Plains coal mine will have a flow-on effect on businesses in the Mackay region, the Resource Industry Network has warned.

General manager Julie Boyd said mining contractors would be the worst hit.

“In the current circumstances we are seeing a very low coal price,” she said.

“This has left many contractors in a difficult financial position.

“It certainly will have a flow-on effect in the region.”

Yesterday’s announcement to close the mine was a blow to Leighton Holdings.

The mining contractor was one year into a three-year contract at the site.

The company was unavailable for comment.

Brisbane-based firm Ausenco was responsible for the operation of the Coal Handling and Preparation Plant at the site.

An Ausenco spokeswoman said she did not expect the closure of the mine to have a material impact on the company.

“At this point we are still working through the details of the transition with Isaac Plains Coal Management,” she said.

“We will work closely with our employees to support people whose roles become redundant as a result of this change.”

http://www.dailymercury.com.au/news/low-price-oversupply-is-coals-double-whammy/2404891/