Glencore to close Australian coalmine with loss of 350 jobs

Glencore to close Australian coalmine with loss of 350 jobs

Tahmoor mine in NSW will be closed by 2019, the Swiss-based company has said, thanks to falling prices.

Glencore is to close its Tahmoor coalmine in Australia by early 2019 with the loss of 350 jobs, the latest victims of low prices hurting the sector.

Glencore, a mining and commodity trading company based in Switzerland, said it has begun consultation with the 350 employees at the coking coalmine in New South Wales.

The mine has been operating since 1979 and last year produced 2.1m tonnes of metallurgical coal used in steel making.

“The decision has been made as a result of continued low prices in global coal markets, which has meant the economic return from reserves still available at Tahmoor are not sufficient to warrant the investment required to mine them,” Glencore said in a statement.

Like other miners, Glencore has been hit hard by the collapse in commodity prices linked to slowing demand from China. It has also slashed production of copper and oil as well as cutting investment and costs.

Glencore is one of Australia’s largest coal producers running 18 mines and employing some 7,650 workers.

Global metallurgical coal prices have dropped from more than $300 a tonne in 2011 to around $94 in step with weakening steel prices.

The leading American coal producer, Peabody Energy, filed for bankruptcy protection in April after a sharp drop in coal prices left it unable to service debt of US$10.1bn, much of it incurred for an expansion into Australia.

Last year, Chinese-controlled coalminer Yancoal Australia cut close to half the jobs at two of its collieries after losses over two years climbed to more than A$1 billion ($724.50 million).

In one of the most glaring examples of exiting coal at any cost, Brazil’s Vale, sold a mothballed coalmine in Australia to a local operator for A$1. At peak coal prices, the mine was worth around A$500m.

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