NOBODY can predict the depth of the decline, obviously, but there is no doubt the coal industry is on the way down as far as profitability is concerned.
For the past four years it has looked as though coal and iron ore were the only industries able to withstand the financial tremors shaking the rest of the economy.
But now, reality has set in.
Prices go up and down from week to week – as prices do – but few in the coal industry harbour real hopes of a return to the boom-era sellers’ market any time soon. In head offices across the industry, chief financial officers are wielding their red pencils and slashing costs to suit the new reality of long-term lower prices.
And the new frugal circumstances have hit Queensland contracting company Mastermyne, which has about 1100 people on its books including 130 at Centennial Coal’s Newstan mine, west of Lake Macquarie.
Centennial was bought two years ago by Thai company Banpu, which paid a boom-time $2.5billion for the business. Banpu is facing its own market pressures – its share price and profits are well down – and Centennial has opted to shut its Mannering mine south of the Lake and shelve an expansion of Newstan.
The Mannering workers have been offered new jobs but Centennial has dispensed with the services of Mastermyne, whose employees are now losing their jobs in the run-up to Christmas.
When things were good, and the mining industry was expanding rapidly, thousands of extra workers found their way into contract mining jobs that traded employment security for sometimes eye-boggling rates of pay.
Many contract workers say they are happy to forgo the certainty of permanent employment for the higher-paid freedom of moving from site to site and town to town.
But not everyone is in this boat, and the depth of the downturn now gripping the industry means that, for some retrenched contractors at least, new jobs will be hard to find.
One upside of the decline may be that those industries that found themselves unable to compete for labour during the wages boom may be able to re-recruit some of the people they lost to the mines.
But for the Hunter as a whole, the Mastermyne lay-offs are a symbol of a new reality, a period of uncertainty where the future for high-cost mines, especially, remains far from certain.
The industry will survive, of course, and the volume of sales this year will again be at record levels. But for those losing their jobs, the immediate future looks unseasonably bleak.