unions say they'll mount a strong fight against potential job losses at state-owned coal mining company Solid Energy.
The Government's revealed today the company's in such bad shape that it may need a taxpayer bail-out, and job losses are on the cards.
“With a big drop in the coal price and then certainly a drop in their export volumes it's put the company in quite a difficult position,” Finance Minister Bill English told reporters today.
“It's a disaster,” says Labour MP Clayton Cosgrove. “Four years ago this company was an export award-winning company. It has been run down by this government by mismanagement, lack of monitoring and now it's a basket case.”
Coal prices fell 40 percent last year - Solid Energy lost $40 million - it owes the banks another $389 million.
But the Government's ready to step in.
“We're not going to let it go into receivership,” says Mr English.
The state-owned asset employs more than 1200 people, mainly in mines on the West Coast and in Waikato.
More than 400 staff were already laid off last year, mostly at its now mothballed Spring Creek mine on the West Coast.
The miner's union says the company's already operating at rock-bottom, and it's vowing to fight hard to protect remaining staff.
“The workers of Solid Energy will not expect to have to pay for the stupidity or the activities of the previous board or the previous management. No doubt about it, they will not pay,” says EPMU’s Ged O’Connell.
Even so, the Government's signalled more cuts are likely.
“There's clearly going to be discussion about whether they're carrying too much overhead, which mines are viable and which ones aren't,” says Mr English.
Plans to partially sell the company under the Government's asset sales programme are now on hold indefinitely as Solid Energy tries to climb back into the black.