Glencore is considering shutting some of its coal mining operations in South Africa due to a slump in commodity prices.
The company’s decision is aimed at reducing its overall production in the country by at least five million tonnes (Mt) of coal a year, which will impact around 1,070 jobs.
This latest announcement follows a review of Glencore’s Optimum Coal subsidiary, which was set-up to tackle ongoing financial difficulties at Optimum.
According to the company, the Optimum open-cast operations, major portions of the coal processing plants and associated support services could be included in the closure and would be placed on care and maintenance.
The company plans to re-open the plants when economic conditions improve.
Optimum is claimed to produce 10Mt of saleable coal a year from open-cast and underground mines. Half of the coal is bought domestically by Eskom power utility, while the other half is exported.
In order to ensure a continued supply of coal to the utility’s coal-fired Hendrina power station, Optimum proposes to retain the underground mining operations and sufficient processing capacity.
After informing the Department of Mineral Resources and relevant unions of the potential closures, Optimum will enter into a Section 189 process with the unions and employees to discuss settlement agreements for affected employees.
Optimum will explore various options for redeployment across the Glencore’s coal operations in South African, and plans to offer support services for employees.