Mining giant BHP Billiton announced today a shut down of production at a loss-making mine in northeast Australia. The move comes a year after a massive flooding devastated coal mining in the state in addition to general low output, high costs and soft coal prices.
Lower production is much attributed to the industrial action that came after the flooding across Queensland in 2011, according to the company.
"As a result, we have had to take urgent steps to both stop the losses and find the best way to secure the operation's long-term future," BHP said.
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That's bad news for the mine's workers, who claim to have had no warning that operations would cease. Union leaders will meet tomorrow to discuss redeployment opportunities at the nearby Saraji mine. The Norwich Park mine accounts for 490 workers and 900 outside contractors.
Earlier this month, BHP declared force majeure, a legal clause relieving companies of immediate supply obligations due to circumstances out of their control. It has been estimated that heavy rains have led to a loss of production of 2 to 3 million tonnes across six mines in the area in this year alone. On top of that, prices of metallurgical coal have weakened.
After a seven-week review, BHP could find no solution for salvaging profits from the mine.
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