Alinta Energy to close Leigh Creek mine in November, power plants in March
IT was the coal mining town that grew almost seven decades ago to support Premier Tom Playford’s dream South Australia could generate its own electricity and end dependence on interstate power.
- Is this the end for Leigh Creek?
- Port Augusta, Leigh Creek to lose 440 jobs
- South Australia’s jobless rate worst in the nation
IT was the coal mining town that grew almost seven decades ago to support Premier Tom Playford’s dream South Australia could generate its own electricity and end dependence on interstate power.
But now Leigh Creek, the proud outpost in the state’s far north, is facing a death sentence after Alinta Energy announced it was pulling the plug on its coal mine, throwing 253 workers out of a job before Christmas.
Alinta on Thursday said it would shut down the mine on November 17 ahead of the previously announced closure of its Flinders Operations, which includes the state’s operating coal-fired power plants at Port Augusta, by March 31 next year.
Redundancy packages will be offered to some of the 478 employees in South Australia before the end of the month.
Only 132 of them — 69 at Leigh Creek, 58 at Port Augusta and 5 in Adelaide — have the right to return to the public sector under a pre-privatisation deal.
Angry residents told The Advertiser families are bracing for a hit just before Christmas.
“They (Alinta) said they are disappointed with the closure and all that, but I didn’t want to hear any more, I simply walked out,” one local who attended the meeting said.
“Some of them have worked there for generations and frankly, there are very few future jobs in the region after the shutdowns.”
Lifetime resident Kirsty Nicholls said she was unsure what she would do next.
“I think I can stay here and work at the shop and try to stay for at least another year,” she said.
“The town will definitely change. I don’t know if it will be good or bad.’’
The Leigh Creek population peaked at around 2500 in the late 1980 but has dwindled to around 500.
Leigh Creek Foodland owner Desley Wardell said the town was suffering.
“We have known it’s been coming,” she said. “But it’s like when you know someone is dying and then they die ... it really hits you. and today has really hit us.’’
Alinta Energy chief executive Jeff Dimery said millions had been spent trying to make the SA business viable, but the bipartisan push for a renewables policy and the low wholesale electricity prices had led to the decision to shut shop.
“The plant was not profitable today and was not going to be in the future, it was a straight commercial decision,” he said.
Alinta Energy, owned by international private equity group TPG, has committed $3.5 million for transitional support services to workers and will spend $75 million on redundancy benefits and entitlement packages.
“But the hardest days for workers are ahead of them,” said Australian Services Union secretary Joseph Scales.
“This is real now. Workers must begin the difficult process of winding down work, looking for a new job and in many cases, packing their families to move to where employment is more available.”
The State Government has committed $258,000 for Leigh Creek from its $1 million package for Upper Spencer Gulf and will continue hospital, school, ambulance and police services until at least July 2018.
Energy Minister Tom Koutsantonis and Innovation Minister Kyam Maher expected workers to find jobs in public service and mining and highlighted the town’s tourism prospects.
Mr Koutsantonis assured South Australians the closure would not affect the state’s power supply.
Leigh Creek had potential beyond being a mining town, he said, adding it could be central to generating jobs in the tourism industry.
“Alinta are required to fund and maintain the town for a period of time after the closure,” Mr Koutsantonis said.
“We’re in discussions with Alinta about how to utilise Leigh Creek.
“There’s good infrastructure in the town. It’s on the doorstep of some of the great tourism attractions anywhere in the world.”
Mr Koutsantonis said the government was also keen to explore ideas from private investors.
Port Augusta Mayor Sam Johnson said the local economy is diversified and in a position to make the most of all new opportunities.
Resident Tracey Kelly said that the mood in the town was “a bit of a downer” since news of the announcement got around.
“People sort of seemed a bit slumped over, no one wants to go,” she said.
— With Lauren Novak
ANALYSIS
Modern energies cost old industry
By Paul Starick
SOUTH Australia is a world leader in renewable energy use but this transition is coming at a cost — jobs in “old” industries.
The Leigh Creek coal mine, which employs 253 people, will close on November 17. The Port Augusta power stations it supplies, where 225 people work, will shut by March 31 next year.
They are victims of an economy in transition, where dwindling heavy manufacturing industry requires less total power, and the state’s headlong march into renewable energy.
Former premier Mike Rann spearheaded the clean energy drive. In mid-2009, for example, he declared SA already led the nation in renewable energy production but said his government wanted the state to become “Australia’s green energy powerhouse”. This would create “green jobs in a renewable energy industry alongside our defence and mining sectors”.
Alinta, which will only have a corporate office in Adelaide after March, must continue to supply Leigh Creek with water and sewerage services until then.
While defence shipbuilding has been becalmed and Olympic Dam’s expansion shelved, renewable energy in SA has surged.
An Energy Supply Association of Australia (ESAA) fact sheet released last month showed SA was second only to the American state of Iowa in wind and solar capacity.
But, as ESAA chief executive officer Matthew Warren declared the week after Alinta initially revealed Port Augusta and Leigh Creek would close, SA’s renewable energy leadership is not without risk or consequences.
Alinta Energy, rightly, says its focus now is on helping its people. It has allocated $75 million to redundancy benefits and entitlements and more than $3.5 million to support services, such as retraining and career counselling.
Port Augusta Mayor Sam Johnson says the local economy is more diversified than in the 1990s and offers hope of continuing in electricity generation “in different ways”.
Nuclear Fuel Cycle Royal Commissioner Kevin Scarce is working to examine what industry growth opportunities it might present. This, of course, is based on the Royal Commission’s examination of nuclear energy, which has very low greenhouse gas emissions.
The Royal Commission last month also heard SA Power Network’s forecast that two-thirds of SA households would use solar in about 20 years.
There are many benefits to the adoption of renewables — there also some painful costs.