About 220 staff will lose their jobs at the Spring Creek mine, Solid Energy confirmed today.
Solid Energy told staff this morning it would place the mine into care and maintenance.
The decision means redundancy for about 220 staff at Spring Creek and the nearby Rocky Creek coal-handling and processing plant.
A further 130 mine contractors will lose their contracts.
Solid Energy said it would offer redundant staff the opportunity to apply for positions in a team of 16 that would maintain the mine and a team of four at Rocky Creek that would continue to process coal from the company's Strongman mining licence area.
Solid Energy chief executive Don Elder said the company was aware of the impact its decision would have on the West Coast economy, but given the outlook for international semi-soft coking coal prices, the Spring Creek operation "remained uneconomic".
"Solid Energy has committed to work with the community to minimise the impact of winding down the Spring Creek operation and to help staff find new employment,'' he said.
''It will retain dedicated capability in Greymouth for 12 months to explore a number of opportunities, including the Christchurch rebuild."
He said the decision had been made "as part of a wider reorganisation in response to extremely weak global coal markets".
However, West Coast Green Party MP Kevin Hague said he believed the closure of the Spring Creek Mine was driven by the Government's "desire to maximise the share price of Solid Energy".
"Rather than managing the price fluctuations of coal and continuing to trade, the board of Spring Creek have cut their losses in order to get Solid Energy ready for a future sale," Hague said today.
The job losses would create a "devastating knock-on effect" and likely lead to far more job losses on the coast than those directly lost through Spring Creek's closure, he said.
"The Government's asset sales agenda is driven by the desire to create short term profit at the cost of long term sustainable job creation and sensible management of our energy sector," he said.
"New Zealand needs to keep our assets in public ownership so we can sensibly manage the demands of the energy sector and take into consideration the impact of changes on jobs, communities, consumers and the environment."
About 150 people attended a meeting held by representatives of the Stronger Christchurch Infrastructure Rebuild Team (Scirt) in Greymouth on September 28 to outline the opportunities they had available.
Scirt has received about 100 applications of interest to date.
Solid Energy has retained Stellar Recruitment to assist staff interested in mining opportunities in Australia.
"Solid Energy believes the mine still has potential if or when international markets strengthen for steel-grade coal, particularly as a blend stock for some production from other mines or as a speciality product," Elder said.
"For that reason, the company has decided to place the mine into care and maintenance, which preserves future options, rather than closure, which would make it nearly impossible to recover flooded infrastructure and reopen the mine in future."
Care and maintenance is a transitional state when a mine has stopped production for technical, environmental, financial or other reasons but the owner has not decided if or when mine operations will resume, or if it will be sold, or closed and abandoned.
Solid Energy also plans to reduce corporate, support services and development jobs from 313 to 151.
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