July 24, 2013 / 10:41 AM / in 4 years

Glencore's Australia coal mine restructuring puts over 300 jobs at risk

PERTH, July 24 (Reuters) - More than 300 workers at Glencore Xstrata’s Collinsville coal mine in Australia were laid off by operator Thiess on Wednesday, as the commodities group moves to take over operations in a bid to restore the mine to profitability.

Glencore said it was unclear how many of the laid off employees it might hire back as it overhauls operations to improve equipment and labour productivity.

The moves come as plummeting coal prices have forced companies in Australia to steadily cut jobs over the last six months to a year.

Thiess, a unit of Leighton Holdings, said it gave pink slips to 321 workers at the mine on Wednesday. The mine currently has a workforce of about 420, of which 400 are Thiess employees, according to Glencore.

Key in determining whether or not workers will be re-hired is whether or not they agree to new terms of employment under Glencore.

“Under the current workplace agreement, it is going to be very difficult for the mine to be viable in the future,” Glencore spokesman Francis Derosa said.

The mine, in operation for around 100 years, has been losing “substantial” amounts of money for the last 18 months, Derosa said, adding that until there is an agreement with the employees’ union Glencore will not be able to give specific numbers on how many people it will employ going forward.

Stephen Smythe, a spokesman for the union, said the move may be aimed at closing the mine altogether.

“We’re fairly optimistic that the mine can have a viable long-term future, but only if the measures that we’ve identified come to fruition,” Derosa said.

Glencore, then Xstrata, announced in February that it would take over the mine’s operations from Thiess in August. Glencore acquired miner Xstrata in May.

Earlier this week, Peabody Energy Group the world’s largest private-sector coal miner, said it will cut 170 jobs across Australia as it looks to reduce costs amid a global glut in coal supply.

Prices for thermal coal, used for power generation, have fallen over 30 percent in the last two years to under $80 per tonne, while prices for coking coal, used for steelmaking, have shed about 40 percent in the last year to around $130 per tonne.

Glencore’s Collinsville mine produced 4 million tonnes of thermal coal and coking coal last year.

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