27th Mar 2014 11:41
LONDON (Alliance News) - Glencore Xstrata PLC said Thursday it is planning to suspend operations at its Ravensworth underground coal mine in Australia, after a major fall in coal market prices.
A spokesman for the miner said it was no longer financially viable to operate the mine due to lower coal prices, high production costs, the strength of the Australian dollar and geological problems in future mining areas.
Coal mining in Australia has struggled in recent years as other miners like AngloAmerican PLC, BHP Billiton PLC and Rio Tinto PLC have closed mines and cut staff in the country to offset difficult conditions.
The price of coking coal used in steelmaking has tumbled by around USD200 per tonne in previous years from its 2012 high above USD300, while recent metallurgical coal price settlements by major coal miners indicated a fall in the price of all metallurgical coal types in the first quarter, according to Reuters.
The Ravensworth mine, which produced 2.1 million tonnes of semi-soft coking coal in 2013 and employs 130 full-time employees, will be put on care and maintenance from September, the Glencore spokesman told Alliance News.
Glencore said it has informed employees at the site that 17 redundancies at the mine will follow completion of certain ongoing work on site and once the mine is placed on care and maintenance, a small full-time workforce will remain on site to manage the mine.
The spokesman added that redeployment options across the company's other mining operations are being investigated.
Glencore shares were down 1.7% to 305.90 pence Thursday morning, while Anglo American was down 1.8% to 1,462.50 pence and Rio Tinto was down 1.8% to 3,244.00 pence, putting them all in the top ten FTSE 100 fallers Thursday. BHP Billiton was down 0.8% to 1,816.50 pence.
By Tom McIvor; [email protected]; @TomMcIvor1
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