Whitehaven Coal plans to lay off around 50 mostly salaried, non-production workers at its Daunia and Blackwater coking coal mines to streamline operations and standardise employment arrangements.
The company only expects to cut two production roles across the mines, Lithos understands. It wants to scrap them to bring the mines into line with its other coal operations, a person familiar with the situation told Lithos on 12 November.
Whitehaven Coal bought Daunia and Blackwater from the BHP-Mitsubishi Alliance (BMA) in April 2024, and maintained many existing roles when it took over.
“[The company’s planned workforce] changes are subject to consultation with impacted staff,” a Whitehaven Coal spokesperson told Lithos. “We will continue to support our people through this process,” they said.
Whitehaven Coal has faced cost challenges at Daunia and Blackwater in recent years. In 2023, the company expected its unit production costs at the two mines to average A$122/tonne – on a FOB basis – over the 2024-28 financial years. But it lifted its cost forecast to between A$140/tonne and A$145/tonne in February, largely because of inflation and improved assumptions.
“The estimates we put out [in 2023] were based on [due diligence] … but inflation has done its ugly work for the business,” Whitehaven Coal Chief Executive Officer Paul Flynn told investors on 19 February.
Whitehaven Coal’s coking coal production costs currently hover above A$145/tonne, excluding mineral royalty fees, according to one coal trader. The company sold coking coal for A$257/tonne in July-September, up from A$200/tonne a year earlier, it said in a quarterly report on 23 October.
Whitehaven Coal’s Daunia and Blackwater layoff plans come less than two weeks after the Queensland Land Court upheld the Department of Environment, Science, and Innovation’s (DESI) approval of its planned A$1 billion Winchester South coking coal mine.
The company plans to annually produce 15 million tonnes of unprocessed coal at Winchester South for 28 years, according to an Environmental Impact Statement. But it has not announced a development timeline for the mine.
“The timing of [all] development plans … will reflect competing opportunities for capital and market conditions,” Whitehaven Coal told investors in a quarterly report on 23 October.
The company also needs to secure Federal Government approval for Winchester South. The project is progressing through the Government’s environmental approval process, it said.
By Avinash Govind