New World Resources unit to axe half its staff due to weak coal prices

2 February 2016 (Last Updated February 2nd, 2016 18:30)

Czech mining company New World Resources (NWR) unit OKD is reportedly planning to cut half its workforce by 2018 due to weak coal prices.

Paskov

Czech mining company New World Resources (NWR) unit OKD is reportedly planning to cut half its workforce by 2018 due to weak coal prices.

OKD chief executive Dale Ekmark said between 5,000 and 6,000 jobs will be cut, with three mines in the Czech Republic also closing.

The latest decision comes after the Czech Government refused to grant a CZK4bn bailout package to OKD in 2015.

Due to low coking coal prices, the company had previously announced restructuring plans.

NWR is holding discussions with the Czech state on reorganising to streamline by closing its Paskov, Lazy and Darkov mines, as well as obtain new funding.

"We would like to create a slimmer organisation that would be sustainable in this new environment of long-term low coal prices. "

Reuters quoted Ekmark saying: "We would like to create a slimmer organisation that would be sustainable in this new environment of long-term low coal prices."

At present, OKD has 12,828 staff, including 3,013 agency workers.

In 2014, NWR restructured its debt and equity and has also struggled to generate cash due to a fall in coking coal prices.

Going forward, NWR plans to hold discussions with Czech Government on OKD's future.

Ekmark said that the approval given by Environment Ministry for extended mining in Czech Republic until 2023 will prevent the closure of other OKD mines.


Image: OKD's Paskov mine is set to close at the end of 2016. Photo: courtesy of New World Resources Plc.