Union says closure of coal complex could cost Vale $63 million

June 3, 2014

After announcing its plans to close the Integra coal complex in Australia’s Hunter Valley, Australia’s Construction, Forestry, Mining and Energy Union (CFMEU) said Vale could faces a $63 million, Australian Mining reported.

Vale had previously announced that the Integra coal complex was no longed economically viable and asked workers to stay at home on full pay. About 500 workers at the complex, which includes the Camberwell openpit and Glennies Creek underground mine could lose their jobs.

The CFMEU’s Peter Jordan said the closure of the mines will prove costly for Vale as it will be forced to pay millions in cancelled contracts at the site as well as for port and rail contracts, The Singleton Argus reported.

“They informed us they will be cancelling a contract to cut coal and paying the $33 million dollar penalty that goes with this cancellation,” Jordan said.

“In addition they have not been relieved of their ‘take or pay’ obligations.”

Jordan said this port and rail access amounts to a further $30 million dollars a year.

“The fact the company appears to be throwing away around $60 million dollars is concerning and adds credibility to the rumor that the mine has been sold.

“We are hearing reports that the open cut mine has been sold to a Chinese company, the Shenhua Group who are involved in the Watermark project near Gunnedah and the closure is just about changing the workforce arrangements.”

However Jordan conceded that Vale has strongly denied a sale of the operation has occurred.
 

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