* Glencore cuts 3 mln T coal output at Newlands, Oaky Creek
* Job cuts will shrink labour force at the mines 25 pct
* Output, labour cuts follow 40 pct decline in coal prices
PERTH, June 27 Glencore Xstrata said on
Thursday it has cut back coal production and laid off 450
workers at two of its Australian coal mines due to falling coal
prices, higher costs and the strength of the Australian dollar.
The latest cuts will shave off about 3 million tonnes of
coal production at Glencore's Newlands and Oaky Creek mines,
according to a source familiar with the matter.
"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 Xstrata said in a statement on
The cuts are just the latest in a string of announcements of
layoffs, mine closures and cost-cutting among Australian miners,
as they try to keep operations profitable as resource prices
fall, largely due to slower-than-expected growth from China.
Prices for thermal coal, used for power generation, have
fallen nearly 40 percent in the last two years from a record
$130 per tonne to around $80 per tonne; prices for coking coal,
used for steelmaking, have dropped about 40 percent in the last
year to around $130 per tonne.
The drop in prices has spurred Australian miners to cut an
estimated 9.4 million tonnes of thermal and coking coal output
through mine closures, but another 66.3 million tonnes of
production is coming online through the end of 2013, still
leaving the market heavily over supplied, according to UBS.
Earlier this week, Glencore said it had laid off 46 workers
at its Ravensworth coal mine, while Peabody announced it
had cut 450 jobs across its mines in Australia's New South Wales
and Queensland states.
Glencore's Oaky Creek, which produces coking coal, will see
around a 2 million tonne cut in production. Newlands, which
produces both thermal and coking coal, will cut production by
about 1 million tonnes.
The mines have a capacity of around 8 million tonnes a year
each. The latest job cuts will shrink the workforces at the two
mines by around 25 percent.
Australia's Bureau of Resources and Energy Economics (BREE)
forecast that Australia will see around a 5 percent increase in
both thermal and coking coal despite softening demand and the
global oversupply of coal.