CHRISTMAS mine shutdowns are returning to the Hunter coal industry as loss-making companies look to save money.
A spokesman for the Chinese-backed Yancoal said yesterday that its Stratford and Duralie mines at Gloucester were likely to shut down for a fortnight or so over Christmas.
Confirmation of the Yancoal shutdown comes as Vale Australia, the Brazilian-owned operator of the Camberwell open-cut, is moving to chop 40 jobs from a workforce of about 250.
Construction, Forestry, Mining and Energy Union district president Peter Jordan said the union was negotiating to reduce the Camberwell job losses, which followed Vale’s decision to cut production from seven days to five.
Mr Jordan said the shutdown at Duralie and Stratford was disappointing because the union believed it had reached a compromise solution with Yancoal.
‘‘I don’t think people object to having time off over Christmas, but in this case it’s just the way the company has gone about it,’’ Mr Jordan said.
While full-time employees would be paid for their holidays, contractors and casual workers would miss out.
The two mines between them employ nearly 400 people.
Mr Jordan said Hunter coalmines had largely done away with the traditional Christmas shutdown although some, including the family-owned Rix’s Creek and Bloomfield operations, still stopped for the festive season.
He said falling prices were hurting many coal companies.
‘‘But then again [BHP Billiton’s] Mount Arthur just hired another 30, so it’s not all doom and gloom,’’ Mr Jordan said.
Yancoal’s investor relations manager Ian McAleese said the Stratford and Duralie mines had hundreds of thousands of tonnes of stockpiled coal at the mines, and had no room to store any more.
Coal prices have tumbled in recent months and Yancoal told the stock exchange it was expecting to lose about $53million in the three months to the end of September.
In earlier downturns, coal companies would try to drive coal prices back up again by cutting production to tighten supply.
But Mr McAleese confirmed that 10-year ‘‘take or pay’’ contracts signed by Hunter coal companies to finance the expansion of the port and rail systems made it more expensive to cut production.
Under the ‘‘take or pay’’ arrangements, coal companies must nominate their sales in advance and agree to pay rail and port charges for the full amount even if they sell less.
Port charges are understood to be between $4.50 and $6 a tonne and rail costs for more distant mines would add the same amount or more again.
Yancoal told the stock exchange recently that its ‘‘take or pay’’ losses were having ‘‘an impact on the financial performance of the company’’.
Gunnedah-based Whitehaven Coal is also warning investors of the problems facing the industry, as information made public at last week’s annual general meeting made clear.
The company said that once state government royalties and currency exchange losses were factored into coal prices, Whitehaven and other Newcastle exporters were probably earning about $72 a tonne for steaming coal, which was ‘‘not sustainable for most Australian producers’’.