State-owned energy giant Eesti Energia said it will make around 150 people redundant during 2016 due to low energy prices. The cuts will affect workers at the Narva quarry.
“Reorganization is necessary due to low prices on the energy market, which are not predicted to bounce back and which demand ever greater efficiency from Eesti Energia,” the company said in a press release today.
Mining oil shale rock at the Narva quarry has become more difficult, the company said, adding that when works began 45 years ago, oil shale rock was below 10 meters of earth, but now up to 30 meters of earth has to be dug up first. According to the company, it will continue digging in areas where oil shale rock is more accessible, conserving other areas of the quarry for the future.
“Around 70 percent of our income comes from competitive markets and Eesti Energia must now survive in more complicated conditions than when it had a monopoly over energy production, and world market petrol prices, affecting shale oil production, were twice as high,” board member Andres Vainola said.
He explained that the average monthly electricity price has dropped 20 percent in a year and petrol world market prices 40 percent.
Eesti Energia also planned to let 200 staff go from its underground mining operation this year, but ended up laying off only 114 people.
Unemployment will hit Jõhvi and Sillamäe
The cut-backs will have the greatest impact on the towns of Jõhvi and Sillamäe, where many miners live.
Vladislav Ponjatovski, head of a miners and energy workers union, said between 710-730 people work at the Narva quarry.
“We were able to save union members from the cuts. It is hard for miners to find new employment at the moment. None of the 114 people made redundant in the summer from the 'Estonia' mine have found jobs,” he said.
Ponjatovski said the 150 people will begin to receive 440 euros each month until they find a job, with Eesti Energia paying the sum on top of any redundancy and unemployment benefits.
Editor: J.M. Laats