Gujarat NRE Coking Coal’s new managers have announced to the stock exchange that they will immediately take up the majority share of the struggling Illawarra mining company.
The miners union says this comes as a ‘‘welcome relief’’ for hundreds of unpaid employees.
In a letter published on the Australian Securities Exchange (ASX) this morning, Gujarat’s company secretary Sanjay Sharma said Jindal Steel planned to invest $65.7 million into the company, consequently taking up 53.63 per cent of its total shares.
Mr Sharma also said the new board - with Jindal representative Jasbir Singh at the helm - had met and resolved to approach Jindal for a $50 million short term debt facility, which Gujarat will be able to draw on in $500,000 lots.
This money will be used to ‘‘discharge unpaid employees’ wages and salaries’’ and ‘‘augment the company’s working capital and meet its ongoing funding needs’’, the announcement said.
The board also plans to raise up to $300 million through an issue of new company shares, at a price which is yet to be determined.
These plans were approved by Jindal on October 29, the letter says.
CFMEU district president Bob Timbs said the ASX announcement would help secure future of hundreds of coal mining jobs in the Illawarra.
He said the union looked forward to discussions with the company to settle the outstanding wages and entitlements owed to its workforce.
Mr Timbs thanked union members and their families for the resilience shown to ensure the best outcome for all workers at the Russell Vale and Wongawilli mines.
‘‘The last six weeks have been extremely tough for Gujarat mineworkers, who have gone without pay and had no certainty about the future of their jobs,’’ he said.
‘‘Throughout this ordeal we have held the hope that the mines would be able to trade through this difficult period and continue to produce high quality coal and employ Illawarra mineworkers for many years into the future.
‘‘Now that there is a commitment to invest in the mines, paying all outstanding wages and entitlements must be the company’s first priority.’’