Solid Energy, the state-owned coal miner in voluntary administration, plans to shut down its unprofitable Huntly East mine and lay off 65 staff after deciding the site stands "no chance whatsoever" of finding a buyer.
The Waikato mine has been losing money since undergoing a major restructure in late 2013, costing about $500,000 a month to keep open, and was "deeply unprofitable," chief executive Dan Clifford said in a statement.
Because of that, the company plans to permanently end production, which would see just three of the site's 68 staff kept on, with a small group re-employed to help close the mine, flooding the underground and sealing its entries.
"Because the company does not need the mine's production to meet our current or expected customer demand, and because there is no prospect the mine can be run profitably, we have determined it has no chance whatsoever of attracting a buyer," Clifford said. "We therefore must act to stem these losses."
The majority of Huntly's annual production of 100,000 tonnes of coal goes to New Zealand Steel's Glenbrook mill, and today's announcement comes the same week the steelmaker said it was still renegotiating its supply contracts with Solid Energy.