Glencore contemplates closure of more coal mines in Australia

6 October 2015 (Last Updated October 6th, 2015 18:30)

Glencore has hinted at possible closures of more Hunter Valley coal mines and further cost cutting in Australia due to low prices.

Bulga

Glencore has hinted at possible closures of more Hunter Valley coal mines and further cost cutting in Australia due to low prices.

Glencoreglobal coal assets head Peter Freyberg was quoted by ABC as saying: "The Hunter Valley region represents the single biggest part of our global coal portfolio employing over 3,800 people.

"Further, we won't and can't operate mines that don't make a financial contribution."

In February, Glencore announced its plans to reduce production for the year by 15 million tonnes to align coal output with existing customer demand.

"We won't and can't operate mines that don't make a financial contribution."

The company also proposed cuts in thermal coal production at various sites, by implementing underground roster changes, scaling back several open-pit operations and revising its product portfolio.

However, Freyberg said that the previously announced reduction may not be the final round.

Prices of the commodity, which are currently below $60 per tonne, continue to slide amid fall in demand from China.

The company exports more than 85% of its coal to global markets and the remainder to domestic customers in Australia and South Africa.

Glencore has interests in more than 30 open-cut and underground coal mines in Australia, South Africa and Colombia in addition to exploration projects in British Columbia, Canada.


Image: Glencore's Bulga Coal Complex in Australia. Photo: © Glencore.