Jobs could be at risk as Peabody future in limbo
UPDATE: Resource Industry Network's chairman Tony Caruso said the news from Peabody Energy is definitely concerning but we shouldn't be getting ahead of ourselves.
"The information that has cone from their auditors, obviously will have an impact here in Australia, but being a US based company, even if they did go into administration they go into chapter 11 which is a little bit different to voluntary administration here in Australia. They effectively freeze their debt and keep trading. So what it should mean for Australia is that they will continue on as a business as usual case until they work through their financing issues," Mr Caruso said.
Mr Caruso believes a lot of the work has already been done, due to previous restructures and cost-reduction measures.
"I wouldn't be expecting to see significant changes. Like all companies they'll continue to focus on costs, and reducing their costs, to operate in this part of the cycle. Obviously we are hoping that it doesn't mean they are going to be shutting down operations, more so just focusing on their cash costs and operating prudently through this part of the cycle, while they sort out their cash issues," he said.
EARLIER: CFMEU Qld District President Steve Smyth said the news from Peabody paints a bleak picture for the company and it's employees both in Australia and overseas.
"One of Peabody's problems is they are just a coal commodity, so they are not trading in other commodities so they are going to feel the brunt of current difficult times in the coal industry. There share prices fell from record highs to next to nothing. So it's not a good time for Peabody or their employees," he said.
Mr Smyth believes the possibility that the company may declare bankruptcy in the US is concerning to current employees.
"I have seen that they've said it's business as usual because the Australian coal mines whilst it's it tough, they are still producing coal, they are making money and they are selling the product. We welcome it if Peabody want to talk about it, any of their difficulties or what can be done. We want to make sure that the main game in town is the employment of those workers and their entitlements," Mr Smyth said.
With thousands of employees, contractors and labour hire staff employed in the regions mines, the current situation is disappointing for Mr Smyth.
"Everyone acknowledges that Peabody, like all coal companies are doing it extremely difficult. I've got my view, that through a boom, obviously they didn't put there mind forward to when things came off the boil. It always happens in cycles. That's disappointing. Coal itself, unfortunately I've seen it worse as far as prices. BHP, Rio and other companies can offset with the other commodities they deal in, but Peabody, the largest privately owned coal company in the world are going to feel the brunt of any reduction in the coal price and oversupply," he said.
"Talking to the guys that work at these mines, it's business as usual from the sense, they are there to do a job. Their reducing the costs, they've lifted productivity. The workers are doing everything in there power to assist. That's all they can do. Our focus is on the employees, ensuring their jobs continue, the security is there and their entitlements are protected," he said.
EARLIER: Peabody Energy, one of the world's largest privately owned coal mine companies, is suffering financially.
Peabody owns several Queensland mines including Coppabella, Middlemount, Burton, North Goonyella, Moorvale and Millenium.
The company has declared a 30-day grace period to make interest payments of $US 71 million due on March 15. The company is speaking with lenders about alternatives.
In a statement from Peabody Energy on Wednesday, the company stated "that independent auditors have concluded that our current financial path - absent significant improvements, asset sales and/or other favourable changes - may not be sustainable over the course of the year".
Peabody Energy CEO Amy Schwetz has said it's business as usual for its employees.
"For employees our business moves forward in ordinary course and this has no effect on day-to day operations. Still we recognise that these events may cause uncertainty or contribute to speculation. We will continue to provide updates as appropriate," she said.
October 2014: The American-based company dumped apprentices from its regional operations west of Mackay. About 18 workers were thought to have lost their jobs.
February 2014: 350 jobs were slashes at Peabody Energy's Burton mine. The cuts came as the company announced they were reducing metallurgical coal production by about 1.5 million tonnes a year.
December 2013: Court orders Peabody to reinstate three sacked employees. The court ruled Peabody breached the Fair Work Act when it dismissed three men for union activity at North Goonyella mine, 160km west of Mackay.
July 2014: Peabody spokeswoman has confirms up to 400 positions shed from the company's Queensland and New South Wales operations were in addition to 450 contractor positions axed last month. About 170 workers were expected to lose their jobs as a result.