SYDNEY--Whitehaven Coal Ltd. (WHC. AU), one of Australia's
largest coal miners, said it would lay off workers and cut spending
on heavy equipment in a bid to protect earnings as coal prices
languish near multiyear lows.
It is the latest in a string of cutbacks by Australian coal
producers in response to a drop in commodity prices. Several
companies, including BHP Billiton Ltd. (BHP) and Rio Tinto Ltd.
(RIO), have shut pits, cut jobs, sold smaller assets or delayed
investments in recent months as low prices and weak Asian demand
made many of the country's mines unprofitable.
Whitehaven said the cost-cutting measures are designed to ensure
two open cut mines in New South Wales state, Tarrawonga and
Rocglen, remain viable. About 30 permanent jobs and 10 contract
roles will be cut and the number of trucks and excavators operating
at the sites will be reduced.
Coal prices slipped to multiyear lows last year as the appetite
for raw materials in countries such as China, Australia's biggest
trade partner, fell. They have since recovered slightly though
thermal coal, used for producing electricity, is still worth about
a third less than it was two years ago. The price of coking coal,
used to make steel, is 50% lower over the same period.
"While Whitehaven is a relatively low-cost operator, we are not
immune from the continuing weakness in global coal prices, and are
continuing to review our cost base on an ongoing basis," Managing
Director Tony Haggarty said in a statement.
Whitehaven swung to a loss in the six months ended Dec. 31 and
has forecast a similarly tough period for earnings in the second
half.
New Hope Corp. Ltd. (NHC.AU), another big Australian coal miner,
earlier this week signaled further cost cuts after its fiscal
first-half profit fell sharply due to lower coal prices and the
high Australian dollar, which reduced the value of its exports.
Xstrata PLC (XTA.LN), the world's largest thermal coal exporter
by volume, also announced further plans to restructure its
Australian business, which are expected to result in the loss of
about 100 jobs.
-Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires