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Spring Creek & the Government’s priorities

Written By: - Date published: 7:54 am, September 5th, 2012 - 42 comments
Categories: jobs - Tags:

I’m no fan of coal mining, obviously. We need to reduce the amount of carbon we put in the atmosphere dramatically and stopping digging it up would be a good start. But the Nats have no such concerns. They want more jobs in hydrocarbon extraction. So, why the lack of any kind of response from National to stop job losses at Spring Creek?

Nearly 400 jobs at a state-owned mine are on the line just due to a cyclical downturn in the price of coal, yet National does nothing.

Lets look at National’s 3 big economic policies:

  • Sell assets
  • Trade gaming law for a convention centre in Auckland
  • Encourage more mining and drilling

Asset sales creates no new jobs (unless you count all the contractors Treasury is hiring). There is no permanent employment boost as a result of that policy.

The dirty pokies deal is meant to create 200 jobs in return for creating hundreds of new problem gamblers, with all the attendant social and economic costs of that.

National has added just 600 mining jobs in the past four years. And that gain will all be lost after Spring Creek closes on top of the job losses elsewhere in Solid Energy’s operations.

So, you’ve got a policy that creates no jobs, a policy that might create a few hundred jobs, and a policy that will have created no net jobs in four years if National lets Spring Creek close.

You would think, given National’s insistence that mining is the salvation of the economy and the great creator of jobs (despite the facts), that they would jump to save the jobs at Spring Creek. After all, they’re spending tens of millions on giving away seismic data to oil companies. How much can it take to keep the jobs as Spring Creek going? A few million for a couple of years until the coal price rebounds?

It’s just astounding that National will spend piles of money and political capital on policies that it claims will create jobs but it won’t do anything to save jobs that already exist at a state-owned company.

What is wrong with these people’s priorities? Where is Steven Joyce – who is always talking about wanting more mining jobs – when the chance is there to save some? Where is John Key – who said he would have a relentless focus on jobs? Where is Paula Bennett – who says she will always back Kiwis into work? Where is Bill English, who promised 170,000 more jobs?

David Shearer is right – this is a Nowhere National government.

42 comments on “Spring Creek & the Government’s priorities ”

  1. Eddie you forgot the John Key memorial cycleway!

    Does anyone have any idea if these job losses are to tidy up Solid Energy’s balance sheet to make it more attractive to purchasers? 

    • tc 1.1

      Yup, you always clean up the house before putting it on the market.

      Their IR moves also create a more friendly environment for the would be purchaser.

  2. Dv 2

    One of the ironies is that Spring Creek is developed. We know there is coal there and there is an infrastructure associated with it.

    New mines have to be found and developed at a cost.

    • aerobubble 2.1

      Yes, what about that. Obviously coal prices will rise again. Its just cyclical. Hire
      workers on as temporarily as possible, then when they are sacked deny them as
      much as possible the benefit to tied them over. It crushes the economy, it forces
      people to lose their homes, borrow more, and its know to be reckless for long
      term prosperity. Why does National hate prosperity?

      • Plastic Tolstoy 2.1.1

        National doesn’t hate prosperity, well they clearly hate universal prosperity but they looove prosperity when it is themselves and their like prospering off the backs of others.

        • georgecom 2.1.1.1

          Prosperity is a clear priority for the Nat Govt. The important thing however is into which pockets that prosperity is tucked.

  3. Bill 3

    Wasn’t there something somewhere that showed the 200 pokie/convention centre jobs was a gross over estimate? Or am I getting confused with something else?

    • Te Reo Putake 3.1

      Both overestimated and not permanent or even fulltime work. The number thrown around was the lpool of casual workers who could be called on to work the occasional shift. Hardly winning the jobs jackpot.

    • Draco T Bastard 3.2

      I thought the number that John Key was using was 1000 jobs that was shown to be complete bollocks with the actual number closer to 200.

  4. Newt 4

    I think the whole thing is because it is an SOE mine. If they close it then SE might just have to sell it off cheaply… to a private company that can then run it to the ground for a profit. Why sell the SOEs when you can gut them with less public outcry?

    • aerobubble 4.1

      Same argument applies to asset sales, kiwirail sales. National sell them at the bottom of the
      market, Labour are forced to buy them back once they have been roundly screwed for every
      bone of profitability. Then National claims Labour paid to much, while rushing to sell off
      energy assets when prices are so deflated. What a nasty piece of fiscal public taxpayer
      scamming!

  5. Policy Parrot 5

    “I’m no fan of coal mining, obviously. We need to reduce the amount of carbon we put in the atmosphere dramatically and stopping digging it up would be a good start.”

    Such a doctrinaire statement does nothing to allievate the concerns of the West Coast community, whose livelihoods are threatened currently, and also by such talk. I don’t think coal mining is a particularly good thing, for the reasons you have mentioned, but there are other factors here to think about:
    – 1. That the coal is largely mined for demand; and the way to attack climate change is to persuade energy dependent industries to switch to renewables rather than attack the mining industry. Of course, for every coal mine that is closed, it becomes more viable and lucrative to extract it in terms of smaller volume = higher prices.
    – 2. Sure, if there is going to be a transition, there needs to some serious thought given to what would replace the jobs that the community is dependent on. Too many small towns largely reliant on one employer/industry have died because of a change in the policies of central government, without any thought on the part of central government to its economic impact on that town. Some examples include:
    * Patea in 1980s with the close of the meatworks.
    * Motueka in 1990s with the end of the NZ tobacco industry
    * Putaruru in 2000s with the close of the Putaruru mill.

    I’m not saying don’t pursue these policies, but look at them in a wider sense, and their impact on communities, not simply in isolation.

    • Draco T Bastard 5.1

      Such a doctrinaire statement does nothing to allievate the concerns of the West Coast community, whose livelihoods are threatened currently, and also by such talk.

      But that’s just it, they don’t have to be.

      1.) And one way to do that is to stop mining the coal.
      2.) That’s why the government needs to step in with support that allows the people to continue their lives while encouraging them to do what they want to do. You never know, they could become the Silicon Valley of New Zealand.

  6. Matthew 6

    Key’s a real nowhere man
    sitting in his nowhere land
    making all his nowhere plans
    for nobody

  7. Bored 7

    I am not sure what left leaning Standardistas really want here? I would suggest the first thing might be a repeal of the SOE Act.

    It is fairly obvious to me that the issue at heart is employment of our miners. Under the SOE model the whole thing is commercial, the intent of the legislation was to make it “market” based and remove the whole enterprise from “interventionism” by politicians. Since Roger every NZ government has slavishly adhered to this model: Labour had 9 years to repeal this and sat on their hands.

    We will soon see these miners joined on the dole queue by returning miners from Aussie, the whole thing is about coal prices and demand crashing worldwide (and in China in particular).

    • tc 7.1

      ‘Labour had 9 years to repeal this and sat on their hands ‘ yup, love or despise the NACT they sure know how to get things done.

      Take notes green/labour/etc and learn, you’re going to have plenty to get done if you get to the gov’t benches next time..

  8. Solid Energy are abandoning the Coast and coming to the Waikato (Coal seam gas) and Southland (lignite). That’s all.

  9. Roy 9

    Gotta keep the peons scared and hungry, so that they accept rotten pay and rotten working conditions.

  10. vto 10

    Well, as I said the other day, if the mine needs to close because it makes no money then sell it to the Coasters.

    Solid Energy bought Pike River for $7 million, and the families of the miners killed by outright human and management and board of director and chairman negligence said that if they had known that was the price they would have bought it themselves. Spring Creek must be worth a similar amount.

    So come on Solid Energy – sell it to the locals. Go on. And if you wont do that then why? Is it because it is expected to be immensely profitable over the longer term? And if that is the case then how can you argue that you cannot afford to keep the workforce on? Answers please ….. (ha, what a joke. Silence is the only thing these people know. They are pathetic human beings).

    • Te Reo Putake 10.1

      Spring Creek has recently been revalued at $73 million. This is a significant downgrade (it had previously had a book value of double that). The downgrade, and the mothballing, are to lower the value of the business to make it more attractive in a privatisation float.

      No need for Coasters to buy it, not just because they already own it, but because it’s a viable business that just needs to be run properly in the interests of shareholders and stakeholders. At the moment its being run (down) in the interests of the National Party.

      • vto 10.1.1

        Of course Te Reo, that is par for the course when it comes to the duplicitous nature and tricks and scams and lies of the National Party.

        However, the Coasters should still buy it. After all, the government is encouraging all the rest of NZ to buy it via a float, so owning it must be worthwhile ….

  11. Maybe National is not willing to start mining itself but just wants to sell them off as well, new start with new owners to set the rules and wage and working conditions.

    Funny how they seem to forget they are buying labour to increase their wealth, if they are not going to pay for our labour in a decent manner then no one is going to give 100% of their energies and time for below the cost of living wages.

    In the end this is also why National’s policies won’t work, you can lead a horse to water….

  12. mike 12

    Relax people! Back in May last year Key and English said they would create 170,000 new jobs!

    That their net job creation since then is zero, that the unemployment rate has gone up, and that 1 in 5 kids are living in poverty are not important. It’s what they say that’s important. 170,000 new jobs sounds pretty good to me!

    Pot smoking dole bludgers – what about that then eh? Did you give them permission to buy that tinnie? Neither did I! That’s what we need to get on to. Let’s start talking about that instead ok?

    • vto 12.1

      Exactly.

      Where are the 170,000 jobs Key said last year would be created?

      • tc 12.1.1

        It’s a dinimic world and ackshully what i said there’d be 170 housings for Joel as his dad’s an old banksta buddy of mine as he’s loaded and loves buying housings.

  13. Fortran 13

    Am still waiting for some comment from Shearer as to what Labour would do with the mine in the circumstances.
    Tired of hearing bitching – David what about something positive – tell us – what would Labour do ?

    • tc 13.1

      Dunno why not bitch as it keeps the focus on the abhorrent policies and actions, or lack of, from this gov’t.

      Alternatives can be produced closer to a vote, when our PM can get away with calling positive suggestions ‘a joke’ why give him any material to make the funny ha ha with.

    • georgecom 13.2

      I guess elect them into power and it does become Labours issue to resolve. At present however National is the government. Waiting to see what they’ll do, if anything.

  14. Wayne 14

    So instead of having SOE’s we would have a Govt Deparment employing miners, even though there is no work for them – sound like New Zealand Rail prior to 1984.

    But if the Coast (presumably the West Coast Development Fund) wants to buy the mine, let them. I wonder if they would.

    By the way how does a devalued Solid Energy become a good prospect for sale. I thought one of the Standards positions was that since uncertainty reduces value then it is a bad idea to sell. In any event I presume the Govt wants to get as high a price as is practicable, not the the way round.

    • Draco T Bastard 14.1

      By the way how does a devalued Solid Energy become a good prospect for sale.

      It doesn’t but it does become a good prospect for the buyer and it’s the buyers that NACT are interested in helping.

      In any event I presume the Govt wants to get as high a price as is practicable, not the the way round.

      That would be an assumption that goes against everything this government has done to date.

  15. BernyD 15

    This is a hard one, I really feel sorry for those people.
    Mining for coal was never the answer, it was gold/copper that they should have been investing in.

    If you could build a plant that could extract 99.99% raw mineral , possibly different minerals even, You theoretically could source the ore from the whole world.

    Now if you had a good rail system, you could move tonnage, but the plant would have to be very efficient.

    Otherwise it’s “wait for the Oil prices to drop”

    Has anyone in this Country looked at making High Quality Electrical cables for instance ?
    Megawatt lines need copper / au / aluminium

    • Carol 15.1

      It was a similar situation during the 1980s miners strike in the UK – but that was because Thatcher wanted to replace industry/manufacturing with the finance industry. She should have been working towards different kinds of industries.

      Our government should be working to develop areas of sustainable production in environmentally-friendly industries, and aiming to retrain workers that lose jobs in environmentally damaging industries.

  16. xtasy 16

    The Greens have to accept that there will always be some mining and some may make sense for longer term economic development.

    Look at much more technologically advanced countries like Germany in Europe, they push strongly for the sustainable, environmentally friendlier and yet a bit costly option to invest immensely in wind, solar and tidal energy generation. They (their companies and state agencies) have done their research, calculations and homework. So they do take risks, but they plan LONGER TERM. That also means, they do NOT gove up coal and steel just like that, they just use and produce it more efficiently and in the most environmentally acceptable way.

    That is also, what the Japanese, and increasingly the Chinese and Koreans do, no matter what they invest in.

    That is SMART planning, to look at medium to long term benefits!

    Sadly NZ has for decades followed the folly approach, believing that “free enterprise”, allowing competition at the LOWEST costs, at the highest pressures and with the SHORTEST TERM thinking to dominate. That is the “ChicagoBoy” approach, taken up by idiots like Reagan, Thatcher and others, which really, in hindsight, ruined previously “industrial” countries to become pizza and haircut exchange economies!

    Bloody hell, what did Thatcher ask Kohl, or whomsoever, why Germany was doing so well? They are still DOING THINGS OR MAKING THINGS, was the answer.

    Who is MAKING THINGS in the world today? China! Outsourcing by corporate profit seekers got them the opportunity, so hundreds of thousands of jobs were lost in previously “industrial”, manufacturing and “devoloped” countries.

    Now we get cheap goods for rip off prices, have no jobs and cut each other’s hair to make a living. Sounds damned stupid to me, somehow!

    So get a constructive economic approach working, which will of course also involve some “measured”, sustainable and environmentally aceptable mining, but hopefully also more value added production. To condemn every single mining activity does not make any sense, same as the idiot economic non planning approach by dumbed down Key government!

  17. xtasy 17

    I lke to top it off with “idealism”, not aways possible, but at least “inspiring”:

    Viva el pueblo Chilena and others!

  18. xtasy 18

    My increasing impresion is, that Solid Energy and the present state rulers want to pressure the workers to accept lower working conditions, for the supposed reason of better “competition” with low wage economies overseas. So we are back to square one: what kind of “economy” do NZers want? A low wage selll out turf the burger environment for tourists from low paying China, or to actually dare to “smarten up”, develope” and move on, independent of the foreign markets, but of course to do some trade with them. The loal market needs to be developed, not the one favouring big investors to sell more of the same!

  19. xtasy 19

    What SHOULD happen is to have unions and the companies that depend on their labour, from South Africa, across Latin America and down to here, to align themselves, and to set minimum working and and other conditions, so that the cut throat competition to the lowest pay levels gets bloody stopped. There is no sense in it, and all workers are losing. Bring about fairness by same rights, standards and so for all. Draw the bloody line. Once workers like even on the West Coast start thinking, oh, we can do it better and cheaper, they start betraying their working mates overseas. But then again, it is the bloody stupid “American Dream” and pseudo “NZ dream” bullshit fed to their brains, as if they one day can sit down with Bob Jones and talk about equal terms. So bloody dumb that is, but some are so dumb to fall for it.

  20. hellonearthis 20

    “Paula Bennett – who says she will always back Kiwis into work”.

    I think Paula has been reading the ‘Sun Tzu’ AoW, that ancient Chinese military treatise.
    As her backing people into work. Is alike to the Sun Tzu of placing your troops so they have no escape but to work to live.

  21. Jenny 21

    How much can it take to keep the jobs as Spring Creek going? A few million for a couple of years until the coal price rebounds?

    EDDIE

    Why is there is no National Party, or Labour Party Plan for any transition to Clean Energy?

    Why are the Greens silent?

    Are we all being blind to an opportunity to set an example to the country and the world?

    Eddie’s question echoes calls from the right of the political spectrum for taxpayer funded corporate welfare for Spring Creek coal mine. At the community march in Greymouth, the Mayor of Greymouth Tony Kokshoorn called for the government to gift Spring Creek mine some $70 million.

    But why is no tax payer’s money being considered for investment in alternative green jobs for the Greymouth area?

    Coal has been identified as the number one cause of climate change.

    With the current global crisis in coal price…..

    This is our chance!

    Let’s not miss it.

    The closing of Spring Creek coal mine instead of being a calamity could be an opportunity!

    Let us grab this opportunity to plan the transition away from coal.

    “Most Countries Fail to Plan for Cleaner Energy”

    http://www.scientificamerican.com/article.cfm?id=most-countries-fail-to-plan-for-cleaner-energy

    “Not much has changed. You get the sense that psychologically, and we may just be exquisitely designed not to deal with climate change, everyone is focused on their little piece of the pie. You’re doing what you can day by day. And the problem is that if you really think climate change is a problem, you need to start looking at solutions that are revolutionary.

    “What we’re doing right now is not revolutionary, and frankly, I don’t know what’s going to get us out of this equation,”

    Kevin UmmelCARMA Project Manager

    Carbon Monitoring for Action (CARMA) is the brainchild of former World Bank economist David Wheeler, CARMA has operated for about five years. Ummel said he spent the past year and a half bringing the site up to speed with new global data and a new online interface on which users can do everything from mapping the world’s dirtiest and cleanest power plants to digging deep on utilities in places as far-flung as Juliette, Ga., and Changshu City, China.

    If we are to ever have any chance of transitioning away from fossil fuels. This is our chance!

    With the closing of the Spring Creek coal mine the government and the opposition should be investigating ways in which this workforce can be redeployed. The lessons learnt in the Greymouth community could be the template that could help us plan for the eventual and necessary shut down of the whole coal industry in other mining communities across the country in the least painful way.
    If nothing is done. Nothing will ever be done. We will learn nothing. Repeating the Business As Usual cycle at this stage of natural and human history means staggering from one crisis, on to the next, each crisis worse than the last.

    The boom and bust BAU profit cycle

    It’s odd how the market works. Logically you would think that with the massive global drop in the price of coal this would see the coal industry expanding, in fact the opposite is happening.

    This is because the coal companies imperative is profit, it is not jobs, it is not sustaining communities, it is not the long term effects on the economy, or the climate.

    And while the drop in coal prices (and coal profits) is seeing this deadly industry retrench on a global scale.
    Eventually if we don’t take this opportunity to act – as other fossil fuels become more expensive – cheap coal will become more attractive, and we will witness another restart of the boom bust cycle in coal, probably even more destructive to jobs, communities, and the environment, than anything that’s ever been seen before.

    So let’s take this opportunity for government investment in WWS to save Greymouth.

    Late news: Coal miners are to be deployed to the Christchurch rebuild. This too is a good idea.

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