PERTH (miningweekly.com) – Unlisted energy provider Alinta Energy this week announced that its Port Augusta power stations and the Leigh Creek coal mine, in South Australia, would not operate beyond March 2018, and could close as early as March next year.

“Our decision to close the business has been made at the conclusion of a detailed strategic review during which we have consulted extensively and investigated a range of options with key stakeholders over recent months, including the South Australian government,” Alinta CEO Jeff Dimery said.

“Throughout the four-and-a-half years that we have been running the business we have investigated all possibilities to find a viable economic solution for its continued operation. During this period the company has incurred operating losses in the vicinity of A$100-million while at the same time investing an additional A$200-million to extend the operating life of the Flinders business.

“The decline in demand for energy, as households have become more efficient and the number of industrial customers has declined, combined with policy settings designed to support significant growth in renewable-energy generation have together had the effect of causing a significant oversupply of power available to South Australia.”

Dimery said that Alinta believed that there could be no expectation that the Flinders business could return to profitability.

Some 440 employees would be affected by Alinta’s decision to suspend operations at the Northern and Playford B power stations, as well as the Leigh Creek mine.

The development of a closure plan in consultation with employees and other key stakeholders would start immediately with some operational adjustments at the mine and power station required to support this decision over the near term.

Dimery said that a timetable for the closure would be finalised based on further review of critical risks associated with extended operation, with a view to moving to an earlier closure date, not before March 2016, if circumstances warrant.

Worker’s union Australian Services Union (ASU) said that the shutdown of the operations would be devastating to the region.

“‘The Pt Augusta community cannot afford a blow of 400 jobs to their community, and the South Australian economy cannot afford further job losses,” said ASU secretary Joseph Scales.

He noted that the union would meet with South Australian Premier Jay Weatherill, Mineral Resources and Energy Minister Tom Koutsantonis, and Manufacturing and Innovation Minister Kyam Maher to discuss what support the South Australian government would give these workers.