Solid Energy will close its Terrace underground mine at Reefton in two months, its closure hastened by the world economic slowdown.
The mine, which employs 16 permanent and two fixed-term contract staff, had already lost about six staff over the last 18 months by natural attrition while its future was reviewed.
When the mine was last reviewed about 12 months ago, it was producing very good returns from the international market, said Solid Energy South Island operations manager Simon Doig.
"That underwrote continuing on with Terrace for another 12 months, but unfortunately the international market is in a different environment at the moment with the global credit crunch. That revenue is no longer there," Mr Doig said.
However, the closure was more to do with Terrace being a small, marginal, underground mine than the impact of the recession, he said.
Terrace produced 45,000 tonnes of thermal coal a year, mainly for the South Island industrial market.
In recent years, mining had reached depths of 230m, creating considerable engineering challenges, Mr Doig said.
"Unfortunately, we've reached a point where the costs of going deeper safely cannot be met by the lower returns for thermal coal."
Six workers will transfer to Spring Creek underground mine, near Greymouth, next month.
Solid Energy hoped the remainder would also get jobs at nearby Spring Creek or other Solid Energy mines after Terrace closes on June 26.
However, some miners had indicated they did not want to leave Reefton, Mr Doig said.
Century-old Terrace is Solid Energy's smallest mine.
Solid Energy was looking at resuming production at Island Block opencast mine, which had been in care and maintenance since 2002 after mining became uneconomic. Island Block contained about 5 million tonnes of semi-soft coking coal considered suitable for export.
Source: Stuff.co.nz
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