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Oil report

UPDATE 1-Australia's New Hope to lay off up to 75% of HQ staff amid sour market

(Adds details of the cuts, coal market context)

MELBOURNE Oct 16 (Reuters) - Australian coal miner New Hope Corp Ltd said on Friday it will lay off up to 75% of its workforce from its corporate headquarters due to uncertainty around approvals for its environmentally contentious New Acland mine.

The layoffs come as the outlook for Australian coal has worsened given China’s halt on coal imports from the country and prices that last month hit decade lows amid a COVID-19 pandemic demand slump and abundant cheaper natural gas alternatives.

Under the restructuring, the majority of executives at the Brookwater, Queensland office will be made redundant by the end of November, the company said. Total cuts will equate to around 90 workers, New Hope told Reuters.

The final number will be known in about a week. Employees have until 12 noon on Friday to apply for voluntary redundancy, the business will then work through the applications and decide if forced redundancies will be needed, it said.

New Hope has already laid off 175 employees at New Acland while it awaits approvals for stage 3 expansion of its Queensland project, after a legal victory last year over a community group that sought to halt the expansion.

“We have had to make some extremely difficult decisions but, in reality, even if we were granted approvals for Stage 3 today, we are in for a tough couple of years as we ramp up again,” Chief Executive Officer Reinhold Schmidt said in Friday’s announcement.

Thermal coal prices fell to the lowest in more than a decade last month to less than $50 a tonne.

New Hope swung to an annual loss, it reported last month, hurt by a plunge in coal prices as power demand fell in its key markets due to the pandemic.

China’s move to stop accepting some coal from Australia has added to pressure on New Hope to shore up its domestic market amid trade tension between the two countries. (Reporting by Anushka Trivedi in Bengaluru; Additional reporting by Melanie Burton in Melbourne; Editing by Sam Holmes and Christopher Cushing)

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