UPDATED 5.32pm: Prime Minister John Key is adamant everything was done to try and avoid job losses at Solid Energy.

Solid Energy's Stockton Mine is making 113 people redundant, as it reduces production from 1.4 million tonnes a year, to one million.

John Key says it's a blow for the area, but one from which it can recover.

"They're a tight-knit community. If there's any sort-of light at the end of the tunnel, it's only the unemployment is very low in the South Island. It's running at almost half the national average."

The Prime Minister says Solid Energy tried to turn things around.

"Unfortunately Solid Energy is in a position that pretty much every coal company finds themselves in at the moment.

"It's one of the reasons you've seen the Australian economy so badly affected."

Clifford says something had to give.

"We're losing about $2 million a month in the current pricing and costs. By taking these changes, we will reduce those losses certainly."

Dan Clifford says he won't know whether this will make the mine profitable until after a coal price review in July.

Clifford says staff will have time to consider and provide feedback to today’s proposal.

The company will then undertake a process to select employees for the remaining mining jobs.