Glencore to resume coal mining operations in Australia

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

Glencore has announced that the company will restart operations at its coal mines in Australia following a three-week suspension.

Glencore has announced that the company will restart operations at its coal mines in Australia following a three-week suspension.

Operations had been suspended due to concerns of an over-supply of coal to international markets and intended to combat the glut.

In a statement emailed to Reuters, Glencore said: "We are in the process of resuming coal production, as planned."

"This is a considered management decision given the current over-supply situation and reduces the need to push incremental sales into an already weak pricing environment."

As anticipated by Glencore, the temporary shutdown of coal operations would reduce its output by five million tonnes, representing 2.5% of the country's 2014 forecast for thermal coal exports.

In November, Glencore announced plans to close its Australian mines for a period of three weeks to help counter the crippling global over-supply that had affected prices. The company chose a temporary shutdown instead of resorting to more drastic measures in future.

"This is a considered management decision given the current oversupply situation and reduces the need to push incremental sales into an already weak pricing environment," Glencore added.

According to Glencore, up to a third of the coal sector in Australia is running at a loss at present.

Government figures reveal that Australia's production of thermal coal is expected to increase by 8% to 270 million tonnes in the next two year, Reuters reported.