WHC sheds jobs

Whitehaven Coal will cut 192 jobs from the Daunia and Blackwater coking coal mines acquired from BHP in April, adding to the thousands of jobs lost in the sector this year.

A Whitehaven spokesman said “unnecessary” layers of complexity and duplication were to be stripped out of the assets it acquired in April under a deal that could ultimately cost as much as $US4.1 billion ($6.4 billion).

Whitehaven argued that the Daunia, pictured, and Blackwater workers would be employed on terms “no less favourable” than under BHP’s ownership.

“Following a review of workforce plans at Blackwater and Daunia, we have made the difficult decision to reduce 91 employee roles across the Blackwater and Daunia operations, subject to a consultation process with impacted employees. We will also reduce 101 contractor and labour hire roles,” he said.

The move brings Blackwater and Daunia “in line” with Whitehaven’s operating model.

“This proposed new structure will remove duplication of roles, consolidate teams where logical, minimise unnecessary layers of complexity, and support a clear delineation of roles and responsibilities between site and functional teams,” the spokesman said.

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The cuts may add to tensions between Whitehaven and the workforce it inherited from BHP, which flared in November when workers claimed they were losing lucrative benefits – such as redundancy provisions – in the ownership switch.

Whitehaven has argued that the Daunia and Blackwater workers will be employed on terms “no less favourable” than they were under BHP’s ownership.

“As we always do, we will continue to review and optimise our operational performance to ensure it is as safe and efficient as possible,” said the Whitehaven spokesman on Friday.

The cuts add to the almost 3000 workers affected by BHP’s shuttering of its WA nickel business – although the majority of those nickel workers have been offered redeployment across other BHP assets.

More than 1000 jobs were cut when Alcoa decided to shut the Kwinana alumina refinery in January, while numerous lithium, nickel and iron ore producers have also announced job cuts amid a slide in commodity prices.

Coal has not suffered the sort of price weakness witnessed in iron ore, nickel and lithium this year.

Top quality hard coking coal from Queensland was fetching $US205 ($309) a tonne on August 15 according to S&P Global Platts, which is a high level historically.

Prices for Whitehaven’s traditional product – top-quality thermal coal from NSW – have risen from $US132 a tonne to $US146 a tonne between July 12 and August 9 according to GlobalCoal.

Whitehaven managing director Paul Flynn said in July that labour availability in the mining sector had improved lately. But he said on the same investor call that the cost of labour was not falling and could be further stoked by the Albanese government’s “same job, same pay” agenda.

Queensland coal mines like Daunia and Blackwater were central to the development of Labor’s “same job, same pay” theme because those mines were where BHP’s in-house contracting team, known as operations services, were principally deployed.

Whitehaven paid BHP just under $US2.1 billion upon completion of the deal in April and will be required to pay a further $US1.1 billion over the next three years.

BHP could take a further $US900 million out of the deal if coking coal prices stay above $US159 a tonne over the next three years.

Whitehaven shares were 2 per cent higher at $7.48.