About 15 jobs will be lost when the Illawarra Coke Company closes Coalcliff Cokeworks next year.
Illawarra Coke Company (ICC) owns both the Coalcliff and Corrimal Cokeworks and managing director Rex Wright visited both sites yesterday morning to tell workers of the plan to close the Coalcliff site from mid-2013.
Mr Wright said the decision was brought about by a combination of factors that made it unsustainable to continue to operate two cokeworks.
"In the last two years ICC has been battling to withstand the negative combination of the effects of the European economic crisis on the steelmaking industry which has led to an oversupply of coke worldwide, as well as substantially reduced demand," Mr Wright said.
"Other factors are the persistently high Australian dollar, and closer to home, the continuing closure of domestic customers as well as the direct and indirect cost of the carbon tax."
The news didn't come as a surprise to employees at the two sites - Mr Wright said he had been keeping them informed of the seriousness of the situation.
"This is about the fourth time I've addressed them in the last year about how the business is going and the impact of the European economic crisis," he said.
"We export around 70 to 75 per cent of our output, so we are totally exposed to what happens in the global economy.
"When I met with them in October I had advised them that it looked likely a plant would close but we would make that announcement prior to Christmas."
Mr Wright said about 15 jobs would be lost in the closure and that voluntary redundancies would be offered across both Coalcliff and Corrimal sites.
The remaining workers would then all be based at the Corrimal Cokeworks.
While Mr Wright expected most of the job losses would be accounted for by long-serving employees looking to take early retirement, he could not rule out the possibility of forced redundancies.
United Mine Workers district secretary Graham White said the union had been in talks with the company for some time about the possibility of closure.
"We knew what was coming," he said.
"We've been in consultation with them and we've worked amicably together to reach the outcome.
"We were just waiting for the announcement."
Mr White agreed that some employees nearing retirement age would be happy to take a redundancy but those who were forced out and wanted to continue working would be offered assistance.
"They'll have opportunities and we will go out in the next six months and try and get them jobs," he said.
"That's how we work. That'll be within the region - we'll find something for them."
The decision to close Coalcliff rather than Corrimal was partially driven by the fact that the latter was much closer to Port Kembla, where the coke is sent for export.
"So the cost of getting the coke to the port from Corrimal is about half of what it is from Coalcliff," Mr Wright said.
"There are a few other reasons, but that was a big one."
Until the closure, both cokeworks will continue at full production to fulfil customer orders.
Then Coalcliff will be permanently closed and, in time, ICC will dismantle its buildings and clean up the site.