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Mining and commodities giant Glencore (LON:GLEN) said Monday it is cutting production and 80% of the remaining staff at its Collinsville mine in Australia’s North Queensland as a result of collapsing coal prices.
The cuts would affect around 180 of the 230 people employed at the mine, with most of the layoffs materializing next year, the Swiss company announced in an e-mailed statement.
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Glencore, the world’s biggest exporter of thermal coal, also noted that it is taking further steps to reduce production at Collinsville, beginning by closing the mine for three weeks during the holidays.
The company, which became in recent months the poster child of how hard companies have been hit by an ongoing sell-off in raw materials, described the current coal market as one of the most difficult in the industry's recent history. The Collinsville operation in Queensland's Bowen Basin has been under financial strain for much of 2015. In May, Glencore cut 80 jobs from the same mine in an attempt to reduce coal production at the site.
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"It is a particularly difficult decision given the significant effort and the improvements made at Collinsville by Glencore and the entire workforce over the last two years in attempting to turn around the mine's financial position," the company said.
Glencore, the worst performer in the FTSE 100 index in 2015, has recently taken a series of drastic measures aimed at cutting its nearly $30 billion debt by a third. The $10 billion package of debt-reduction actions, unveiled in September, included halting its copper mines in the Democratic Republic of Congo and Zambia, in a move that it says will take 400,000 tonnes out of the market and potentially provide a boost to metals prices.
Glencore said it would reassess its plans for the operation during 2016, and signaled it was keeping all its mines under review.
By Cecilia Jamasmie via Mining.com
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