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Description: Glencore cuts Oaky, Newlands coal output in Australia, slashes 450 jobs - Read this Platts coal news article here. Plus discover more coal market news, products & services.
Miner Glencore Xstrata said Thursday it would cut production at two Australian coal mines in Queensland's Bowen Basin and eliminate 450 jobs by the end of the year.
The decision targets Glencore's Oaky North underground mine for coking coal exports and its Newlands thermal and coking coal mine.
Oaky North's and Newlands' combined raw coal output of 16 million mt/year would be trimmed by 3 million mt this year, according to an industry source.
"Against a backdrop of lower coal prices, high input costs and the strong Australian dollar, the decision to cut production at the mining operations has been taken to maintain viability in a challenging market," Glencore said in a statement, which did not give figures for the cuts.
Oaky North is part of Glencore's Oaky Creek mining operation. The company said it would continue underground mining at the site with only a single longwall, resulting in the loss of about 150 jobs, pending final production changes.
Glencore has a 55% stake in Oaky Creek, which produces about 8 million mt/year of run-of-mine premium quality coking coal for export through Dalrymple coal terminal and Gladstone port to customers in Europe, Japan and other parts of Asia, according to Glencore's website.
At the company's 55%-owned Newlands mine, which produces around 8 million mt/year of raw thermal and coking coal, Glencore said the planned production cut would lead to the loss of 300 jobs from the mine's underground and surface mining operations.
Newlands employees affected by the decision were being informed Thursday, Glencore said. The company took over Xstrata's former Australian coal mining operations after their recent merger.
"The changes are part of ongoing reviews of Glencore's operations in an increasingly challenging economic climate," the statement said.
Glencore is moving to an owner-operator model at its 55%-owned Collinsville thermal coal mine, which has been managed by Australian mining contractor Thiess. That means Glencore will directly employ staff working on the mine from August, it said.
The Collinsville and Newlands mines both export coal cargoes through the Abbot Point terminal in northeastern Queensland.
Earlier this week, Glencore announced it had restructured the workforce of its Ravensworth underground mine for coking coal in the Hunter Valley coal field of New South Wales, which unconfirmed media reports said resulted in 46 job cuts.