Griffin workers face pay pain
Griffin Coal says it has a radical three-pronged strategy which it believes will turn around the fortunes of its loss-making Collie mine before the end of the year.
David Trench, spokesman for parent company Lanco Infratech, said a program to cut wages, increase the price of its product and improve mine site efficiencies would make Griffin cash-neutral within six months.
Griffin has haemorrhaged money since Lanco bought it from administrators for $800 million in 2010, following the collapse of former coal magnate Ric Stowe's business empire.
There had been suggestions the troubled enterprise could be overtaken by Indonesian mining interests represented by former politicians Julian Grill and Norm Marlborough.
But Mr Trench yesterday said the company was confident of stemming the losses soon.
He would not reveal details but said wage reductions for the operations and maintenance workforce was vital.
"Everybody understands that mine operations can't be sustainable at these wages and it doesn't have a choice than to reduce wages," he said. "The endeavour is to do it in a manner where the pain is manageable for all of us."
_WestBusiness _ can reveal Lanco made a submission to the Fair Work Commission on Friday asking it to determine the impact of a 35-hour week across a range of salary bands, down from the current 42-hour roster.
The new roster, which could remove penalty payments, would result in an average 38 per cent cut to wages - or $47,000 a year for the average worker.
However, Lanco sources have revealed it would be prepared to accept a pay cut worth half this amount - or a 17 per cent reduction in the wages bill.
Lanco would sweeten the deal by offering workers a share in any price increases to the cost of its coal.
The company wants to increase prices for customers, including Bluewaters and Worsely.
Sources indicate the price rise would be worth an additional $10 a tonne.
The company benchmarks its product against Newcastle coal, which is priced at $60/t, down from about $130/t three years ago.
Mr Trench would not comment on the mine site efficiencies program, but _WestBusiness _ understands it started two months ago with measures to fix equipment and hire it on short-term leases to free up its long-term liabilities.
It is also changing the design of the mine site to allow for faster-moving trucks.
Mining union secretary Gary Wood has previously threatened strike action over pay cuts worth tens of thousands of dollars per worker each year.
pay packet whack $47,000 The amount the average Griffin worker could lose from their salary if penalties are removed under a proposed new 35-hour roster.
