Consultation between unions and Peabody Energy have begun, with the CFMEU confirming up to 80 workers at Peabody's Helensburgh mine may be let go.
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On Friday, Peabody confirmed the Metropolitan mine at Helensburgh would soon "transition to a five-day production schedule over the next month, leading to employee and contractor reductions of 20 to 25 per cent".
CFMEU south-western district vice-president Bob Timbs said it was "early days" in the redundancy process, but that the union had met with the company on Monday to begin working on a framework for consultation.
"Voluntary redundancies are on at the moment, so we won't know the extent of any forced redundancies until they go through that period this week," Mr Timbs said.
"Next week, they work out who they will or won't accept for voluntary redundancies. If there's a surplus in the numbers they need, they have to sit down with us to talk about mitigating forced redundancies."
Mr Timbs said a 25 per cent reduction in the workforce at Helensburgh could represent between 70 and 80 jobs. He said Peabody had indicated jobs would be cut across the site's operations.
"Our understanding is that it will be across the board, from CFMEU members, deputies, staff and contractors," Mr Timbs said.
A Peabody spokeswoman said the cuts were "part of a plan to increase productivity, improve cash flows and optimise production at Peabody's Australia operations given current market conditions".