SA braces for more jobs pain
The South Australian Government is bracing for more upheaval in the local mining and resources sector as the state recalibrates from the latest round of massive job cuts.
Hours after Santos announced yesterday that a further 200 positions would go from its Adelaide-based operations, on top of 560 jobs cut in February, Treasurer Tom Koutsantonis told InDaily that there would be more pain to come as the industry adjusted to remain viable amid a volatile resources market.
“Worldwide, commodity prices have fallen dramatically and companies are moving to ensure they remain sustainable in the long-term, ahead of the inevitable upswing,” he said.
“South Australia cannot be immune and the government recognises that there are further hurdles to overcome during this transition.
“But … our thoughts are with the affected workers.
“While the challenges facing the industry are well known, it does not soften the blow of (Monday’s) announcement.”
In the past 12 months, among a backdrop of a state unemployment trend rate of 8.1 per cent – the highest in the country – almost 2500 workers have been stood down from mining operations around the state.
Premier Jay Weatherill told ABC radio last Thursday the state still had to brace itself for the impending Holden closure.
“We’ve still got to consume the Holden closure, so that’s obviously very bad and very significant proposition on the horizon,” he said.
“We’re in a time of very dramatic change in the South Australian economy.
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“We’re seeing a lot of destruction of jobs in the economy, there’s no doubt about that.
“Well I mean we know that out at Whyalla Arrium are also undertaking a big review of their operations, although they do say that they’ve shed a number of jobs already and that they’re hoping to make economies that don’t necessarily cut heavily into the workforce, but look I can’t give any guarantees.”
Santos announced its second round of large job cuts yesterday as part of its ongoing cost cutting to weather low oil prices.
“The job reductions are part of a broader restructure of the eastern Australia business to make it a leaner, more agile organisation delivering lower cost oil and gas from the Cooper Basin,” Santos stated yesterday.
The February and October job cuts result in a 55 per cent reduction in capital expenditure and 11 per cent reduction in unit production costs.
The Santos announcement comes on top of last week’s decision by Alinta Energy to close the Leigh Creek coal operations on 17 November, resulting in the loss of 200 local jobs.
A further 240 jobs will go in March next year when Alinta shuts down its remaining Flinders operations at Port Augusta.
It’s been a horror year for the resources sector which has seen iron ore, oil and gas prices plummet.
Santos manager public affairs, eastern Australia, Matthew Doman acknowledged the job cuts were part of an efficiency drive in response to oil prices falling from around $US100/barrel to under $US40/barrel.
“I don’t think anyone saw it coming,” he told ABC radio this morning.
“There isn’t much work for our employees as there was a year ago. It’s unfortunate.”
Doman said Santos would prepare for a gradual, not a rapid, recovery.
“We have to prepare our business to survive a period of sustained low prices. “
Koutsantonis said the government would continue to engage with resource companies.
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“We will always seek to partner with industry and will stand shoulder to shoulder with the sector in the good times and the bad.
“While we have already done much to grow this industry, we recognise the job is never done – we can and must do more.
“The Cooper Basin has a future as a pre-eminent centre of oil and gas production in Australia and the State Government will continue to work with industry to achieve that.
“Santos is doing all it can to remain a viable multinational, headquartered here in South Australia.”
State Opposition Leader Steven Marshall said the government had not delivered on job security.
“This was meant to be a jobs budget here in South Australia,” he told FIVEaa today.
“Unfortunately we just seem to have been in a jobs freefall ever since the budget was brought down.”
Marshall said the lack of jobs was driving young people interstate.
“We all love Adelaide, we all love South Australia; it’s a great state but our economy is shot.”
Major resources job losses this year
Arrium Whyalla – 500 (January)
Santos – 565 (February)
BGC – 75 (April) 125 (July)
BHP Olympic Dam – 380 (August)
Alinta Leigh Creek – 200 (October), Port Augusta – 240 (March 2016)
Santos – 200 (October)
