Whitehaven Coal cuts 192 jobs following $4.1 billion acquisition

Whitehaven Coal, Australia's largest independent coal miner, is set to cut 192 jobs at the Daunia and Blackwater coking coal mines, which it acquired from global mining giant BHP Group earlier this year. The job cuts come as part of a broader effort to streamline operations and reduce redundancy within the company, according to a spokesperson who communicated with Reuters on Friday.

Whitehaven had completed the acquisition of the Blackwater and Daunia mines in April, following a $4.1 billion deal announced in October of the previous year. The acquisition was a significant move for Whitehaven, expanding its footprint in the coal sector at a time when the industry faces increasing scrutiny and economic pressures.

The company's spokesperson explained that the job cuts are part of a "proposed new structure" aimed at removing duplication of roles, consolidating teams where logical, and minimising unnecessary layers of complexity. This restructuring effort is intended to create a clearer division of roles and responsibilities between site teams and functional teams, ultimately improving operational efficiency.

Specifically, Whitehaven plans to eliminate 91 positions across the Daunia and Blackwater operations. Additionally, the company will reduce 101 contractor and labor hire roles. These cuts are likely to impact the workers who were transferred from BHP to Whitehaven during the acquisition. The relationship between Whitehaven and these employees has already been strained, with workers accusing the company of not providing the promised benefits after the transition, as reported by the Australian Financial Review in November.

The job cuts at Whitehaven are the latest in a series of reductions within Australia's resources sector this year. BHP itself recently announced the temporary suspension of its Western Australia nickel business, affecting nearly 3,000 roles. Similarly, U.S.-based miner Alcoa cut more than 1,000 jobs after deciding to shut down its Kwinana alumina refinery earlier in the year.

Whitehaven's decision to cut jobs comes as the company also looks to sell down a 20% stake in the Blackwater mine. Reports earlier this year indicated that India's JSW Steel is interested in acquiring this stake, though the deal has not yet been finalized.

Despite the job cuts, Whitehaven's shares saw positive movement in the market. The company's stock surged by as much as 2.9% to A$7.54 during the day, before paring back some gains to close the session 1.8% higher at A$7.46. This increase in share price reflects investor confidence in Whitehaven's broader strategy, despite the challenging environment within the coal and resources sector.

The job cuts at Daunia and Blackwater underscore the ongoing challenges faced by the coal industry, which continues to grapple with regulatory pressures, market volatility, and shifting global demand.

Whitehaven's efforts to streamline operations may be a necessary step in maintaining competitiveness, but the impact on workers and local communities will likely be significant. As the company moves forward with its restructuring, the broader implications for Australia's resources sector and the communities dependent on these jobs remain to be seen.