Glencore cuts costs at Australian operations
PERTH (miningweekly.com) – Diversified miner Glencore has unveiled significant cost cuts at its recently acquired coal assets in Queensland and New South Wales.
Speaking to analysts on a site visit, Glencore noted that the Hail Creek operation, acquired from mining major Rio Tinto as part of a $1.7-billion deal, which also included the Valeria coal development, had already achieved cost cuts of around $110-million a year by optimising the mine plan.
The miner told analysts that by changing the orientation of the mine plan and eliminating the dragline from rock moving operations, the company will be able to significantly reduce the low truck and shovel productivity that has constrained the operation.
At the Hunter Valley Operation (HVO), operational changes have already resulted in some $75-million of annual cost improvements, with Glencore highlighting the optimisation of the mine plan, pointing to a 19% reduction in headcount and a 13% reduction in the mine fleet.
Furthermore, Glencore told analysts that significant synergies would be gained through the combination of the HVO with its existing asset base, with the potential to increase the reserves of the Hunter Valley operations by more than 100%.
Glencore holds a 49% interest in HVO in a joint venture with Yancoal, with the miner having paid some $1.14-billion and a 27.9% share of $240-million non-contingent royalties over five year years, for its interest.
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