OKD plans to lay off more than half its workforce and close 3 mines by 2018

New World Resources (NWR), the parent company of mining company OKD, plans to lay off up to 7 000-8 000 of OKD’s approximately 13 000 employees by 2018. The restructuring should enable the company to continue operating at current low coal prices. NWR chief executive Dale Ekmark said this today, as reported by Reuters.

Loss-making NWR is in talks with the Czech government on reorganising and closing some mines in order to secure new funding.

At today’s meeting of the Karviná city council, Ekmark said the company could reduce its workforce from the current roughly 13 000 to 5 000-6 000 by 2018 and close 3 mines.

„We would like to create a leaner organisation that would be sustainable in this new environment of long-term low coal prices. Given the future size of OKD, 5000 to 6000 employees appears to be an economically viable number.“ Ekmark said in a statement.

OKD, which is currently fighting for survival, has 12 828 employees and is one of the largest employers in a region where unemployment stands at 11 %, significantly above the national average of 6,2 %.

NWR restructured its debt and equity in 2014, but continues to face financial difficulties due to low coking coal prices, which are at half their 2011 value.

NWR said in December that the closure of the Paskov and Lazy mines was inevitable without support from stakeholders; Ekmark added today that the Darkov mine could also be closed.

The Czech government has refused to provide financial aid to the company, which it says would benefit only NWR shareholders, but is willing to help affected miners mitigate the social impact.