February 2, 2016 / 10:16 AM / 4 years ago

UPDATE 2-Miner NWR plans to lay off around 7,000 staff by 2018

(Changes sourcing to CEO, adds details on size of layoffs)

PRAGUE, Feb 2 (Reuters) - New World Resources’(NWR) main Czech business OKD plans to lay off more than half its workforce by 2018 in a restructuring to keep it going while coal prices are low, Chief Executive Dale Ekmark said on Tuesday.

Loss-making NWR is in talks with the Czech state on reorganising to slim down by closing mines and secure new funding.

Ekmark told a city council meeting in Karvina, in the country’s industrial northeast where OKD mines are located, that the company could reduce its staff to 5,000 to 6,000 by 2018 and shut three mines.

“We would like to create a slimmer organisation that would be sustainable in this new environment of long-term low coal prices,” Ekmark said in a statement.

“With regard to the future size of OKD, 5,000 to 6,000 employees looks like an economically viable number.”

OKD, which has said it was fighting for survival, has 12,828 staff, including 3,013 agency workers, and is one of the biggest employers in a region where unemployment is at 11 percent, well above the national average of 6.2 percent.

NWR restructured its debt and equity in 2014 but has struggled to generate cash as coking coal prices remain just half of what they were in 2011. It said in December it would continue burning cash for some years, and only expected prices to recover in 2018.

NWR also said then that the closure of its Paskov and Lazy mines was inevitable without stakeholder support. Ekmark said on Tuesday that the Darkov mine could also close.

The government has refused to give aid that would only benefit shareholders but is willing to help affected miners to lessen the social impact. (Reporting by Jason Hovet and Robert Muller, editing by Louise Heavens; Editing by Tom Heneghan)

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