Glencore to shut some operations at Optimum Coal subsidiary in South Africa

Swiss mining company Glencore is moving ahead with its plans to close a few mines owned by its Optimum Coal subsidiary in South Africa.

The mine produces 10 million tonnes of coal per year and a large part of the production is sold to power utility Eskom.

The company blamed weak coal prices for the decision and also reported that the decision would lead to 600 to 700 job cuts.

Glencore said that few of its opencast operations would be placed on care and maintenance, and the company plans to reopen some of the coal processing plants and associated support services if the market conditions improve.

Reuters cited Glencore as saying: "These operations are financially not viable in the current market conditions and ... there are no measures available to avoid the retrenchments."

South Africa's National Union of Mineworkers (NUM) has criticized the company's decision to shut down the assets.

NUM Highveld regional secretary Stanley Lebelo said: "The proposed closure of these operations would affect approximately 1000 permanent employees and 500 contractors.

"It was during this meeting when the management informed the NUM branch leadership that they were going to close down Optimum Coal Mine because they had not made the profit since 2012 because of the difficult market conditions and the continued deterioration in the export coal price.

"We are shocked and this is a catastrophe for our members," Lebelo added.

EBR