Jindal Steel shuts coal mine in Australia as losses mount

01 Sep 2015


Wollongong Coal, majority owned by India-based Jindal Steel and Power, today announced the closure of its Russel Vale Colliery, one of Australia's oldest coal mines, amidst rising costs of production and falling prices of coal and little demand for the fuel.

Idling of the colliery, which started operating in 1887, will cost 80 jobs, said Milind Oza, Wollongong's chief, adding that the decision to close the colliery follows unsuccessful efforts by Jindal to turn around Wollongong Coal.

With market conditions in the sector also continuing to deteriorate and financial pressures on producers mounting, Oza said, the company had no other recourse than idling the mine.

Mining operations at the Russell Vale Colliery will be suspended and placed into 'Care and Maintenance', which will result in a reduction of the workforce by approximately 80 employees.

''Wollongong Coal has been facing a tough operating environment for some time, including ongoing delays in the approval of the company's underground expansion project (UEP) and significant financial losses,'' Wollongong Oza said, adding, ''This decision is not taken lightly and we have continually attempted to avoid this unfortunate situation by undertaking a series of workforce restructurings. "

''With the partial extraction of longwall 6 at the Russell Vale Colliery complete and the company experiencing significant losses, ongoing operations at the colliery are simply not sustainable at this point in time.

''While this is a very sad day, we are absolutely committed to the region for the long-term, with the company having already invested over $400 million over the past two years.

''We will be doing absolutely everything we can to ensure this operation which has been in existence since 1887 will be able to provide ongoing employment and support for the local community.

''Wollongong Coal will continue to seek approval for the UEP at the Russell Vale Colliery, which will allow us to recommence extraction of high-quality coking coal which is in high demand by the global steel market.

''This approval will pave the way to the beginning of a continued long term future in the region and we will continue to work closely with the NSW government to ensure this can happen,'' Oza said.

The operational changes will affect operators, electricians, fitters, deputies and other staff. A small team will be retained to undertake care and maintenance activities.

Wollongong Coal is currently discussing the changes with employees, the Construction, Forestry, Mining and Energy Union (CFMEU) and Association of Professional Engineers, Scientists & Managers, Australia (APESMA).

Wollongong Coal expects the UEP will be referred back to the Planning Assessment Commission for determination later this year.

Wollongong Coal Limited owns and operates Russell Vale Colliery and Wongawilli Colliery in the Southern Coalfields Region of New South Wales. The Russell Vale Colliery was established in 1887 and has provided ongoing employment and support for the local community for 127 years.

Wollongong Coal is developing to become one of the most modern and progressive coal mines in Australia. Its proximity to Sydney and Port Kembla Coal Terminal make it a commercially competitive organisation.

Port Kembla is located at a close proximity of about 15 km from both the collieries and well connected via both rail and road.

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