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Mining company collapses after proponent cancels coal contract

Illawarra Metallurgical Coal
Illawarra Metallurgical Coal

A resources services business will close its doors for good after losing long-term work at a coal operation in New South Wales’ Macarthur region.

Southern Colliery Maintenance (SCM) will permanently shut down after South32 terminated its existing contract for the Appin Underground Coal Mine, 80km southwest of Sydney.

126 jobs lost

SCM co-owners Bill Polychrone, Mark Gazzola, and Paul de Leeuw have reached the difficult decision to cease operating the company and make 126 employees redundant according to the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU).

The move came after South32 told SCM to disband its workforce and similarly ordered CH4 Drilling to let go of 30 specialist gas drainage operators who worked at the same mine.

Wages slashed

CFMEU revealed the proponent also plans to reduce the wages of its remaining 120 staff by only employing them through controversial labour hire provider WorkPac Group at reduced pay rates, lower performance incentives and no quarterly retention bonus according to the union.

“SCM is an innocent victim of South32’s campaign to drive contractors with acceptable employer records out of the region, leaving only the cheapest and worst providers as replacements,” CFMEU southwest district vice president Bob Timbs said in a public statement.

Not ‘performance-related’

None of the redundancies appear to be performance-related as the contractor had won “numerous awards” from the proponent throughout its many years at the mine site.

“As SCM have made clear, at no stage were they criticised by South32 for performance issues,” Timbs said. “Their [only] crime was treating their employees ethically and fairly and thereby setting a bad example by South 32’s standards … it is fair to say SCM were decent bosses who tried to look after their employees. They were locals who cared about this industry and the people who work in it.”

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South32 previously retrenched 250 contractors from Nexus Mining and Mastermyne Group, and many of them have since been rehired through WorkPac, which Fair Work Australia recently found to be using long-term casualisation to avoid paying leave entitlements at another mine.

“Prior to the SCM cut, South32 has used the cover of COVID to cut some 250 contractor jobs over the past two months, mostly from the Appin mine,” Timbs said. “Any local company offering decent pay and conditions is in the firing line for the South 32.”

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