Mining giant, Glencore, has decided to implement production shut downs across its Australian coal operations for three weeks, commencing mid-December.
The pervasive oversupply of coal on the international and domestic markets has been pointed to by Glencore management as the reason behind the decision. The company said the decision “reduces the need to push incremental sales into an already weak pricing environment.”
The global supply glut of coal has pushed prices to five and half year lows.
Glencore’s decision will cut output by about 5 million t. However, analysts say the decision will have little effect on the billion-tonne a year global market.
"If it's only a three-week shutdown it probably won't have a very big impact on price," Indonesia's director general of coal and minerals Sukhyar said.
More than 8000 Glencore coal workers will be forced to take annual leave as a result of the company’s decision. Leave will be brought forward for those employees who have low holiday balances.
Glencore was bullish about future outlook. In a statement, the company said “We remain confident in demand growth for our products and believe that the supply and demand balance will be restored in the medium term.”
Edited from various sources by Sam Dodson
Read the article online at: https://www.worldcoal.com/coal/14112014/glencore-idles-australian-coal-operations-1571/