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PERTH (miningweekly.com) – Mining giant Glencore on Friday confirmed that it would implement production shut-downs across its Australian coal operations for a period of three weeks, starting in mid-December.
The miner said that the shutdowns would result in a reduced output of some five-million tonnes from its Australian coal assets.
The decision was taken in light of the current oversupply situation, and would reduce the need to push incremental sales into an already weak pricing environment, Glencore said on Friday.
“We remain confident in demand growth for our products and believe that the supply and demand balance will be restored in the medium term,” the company added.
Glencore owns 20 coal mines at 13 mine complexes across New South Wales and Queensland, and produced about 80-million tonnes of thermal and coking coal in 2013.
The mining union CFMEU on Friday accused Glencore of not consulting with its workers around the temporary idling of operations, with CFMEU national president Tony Maher warning that it could breach workplace agreements.
“Glencore’s decision to spring this on workers with only a month’s notice will catch some workers short of annual leave and force them to change holiday plans,” said Maher.
“Growing casualisation in the industry means the shutdown will be a disaster for labour hire workers who will simply be told they’re not needed over Christmas. It demonstrates the arrogance of management, who could have negotiated with workers to find mutually suitable ways to reduce production – like letting workers take public holidays.”
The company employs about 8 600 people.
However, Maher has welcomed Glencore’s move to take some supply out of the market, saying that short-sighted overproduction of coal was driving a cycle of lower prices and cost-cutting.
“Glencore’s reduction in production will most likely be met by increases by other mine operators. We urge all coal mining companies to consider looking at ways they can reduce production and tackle the oversupply damaging the industry.”