Glencore slashes Australian coal output

Swiss-based Mining and commodities giant Glencore Xstrata says it is reducing its coal production in Australia by 15 million tonnes amid weak global demand and oversupply.

Glencore slashes Australian coal output
Photo: AFP

It is understood that up to 120 jobs at Glencore's 13 Australian mines could be affected as a result of the cuts announced on Friday, which will include scaling back some operations and deferring projects.
The announcement follows the Zug-based company's decision to shut its mines for three weeks over the Christmas period.
"We plan to reduce 2015 production by 15 million tonnes to more closely align our coal output with current customer demand," Glencore, which produced just under 100 million tonnes of coal in Australia last year, said in a statement.
"We will continue to review all our coal operations in the prevailing economic climate."
Glencore did not say which mines would be affected.

The firm has 8,600 workers at mines in the Australian states of New South Wales and Queensland.
Other major miners such as BHP Billiton and Rio Tinto have continued to ramp up their production levels — particularly in iron ore — despite plunging commodity prices.
Glencore chief executive Ivan Glasenberg was reported to have said in December that "we don't want to oversupply and cannibalize our own business" in a criticism of other miners.
Rival Rio Tinto, which posted a 78 percent rise in 2014 annual net profit to US$6.53 billion earlier this month, said on Friday that it was merging its copper and coal divisions as part of an ongoing cost-cutting drive.
Brazilian iron ore major Vale on Thursday reported a full-year net profit for 2014 of $657 million.

It was a 12.5 percent increase from the previous year but far below analysts' expectations.
The mining giant said revenue in 2014 fell 19.5 percent to $38.2 billion, mostly due to lower iron ore prices.
And BHP Billiton on Tuesday said its net profit for the six months to December 31st almost halved to $4.26 billion on the back of collapsing commodity prices.

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Glencore in black despite low commodity prices

Swiss mining and commodities giant Glencore was back in the black in 2014, posting a $2.3 billion net profit, but took a $1.1 billion impairment charge on dwindling commodity prices, it said on Tuesday.

Glencore in black despite low commodity prices
Photo: AFP

The healthy profit comes after the Swiss company suffered an $8 billion loss a year earlier.
However, taking into account the group's absorption of another Swiss mining giant Xstrata, the company saw its results on a comparable pro forma basis slip seven percent from the year before.
The merger with Xstrata and integration of Canadian company Viterra meanwhile helped boost Glencore's trade, and the company said its adjusted earnings before interest, taxes, depreciation and amortisation, swelled 18 percent to $2.8 billion.
But Glencore, headquartered in Baar in the canton of Zug, took a $1.1 billion impairment charge amid plunging commodity prices, especially in the energy sector.

The company warned last month that because of "volatile" market conditions, it aimed to slash its spending this year to $6.5-6.8 billion, down from the $7.9 billion announced to investors in early December.
Glencore, which has a heavy footprint in copper, coal and oil, as well as in the agriculture commodities sectors, also said it aimed to reduce its coal mine activities in South Africa and in Australia.
"Our ultimate goal remains to grow our free cash flow and return excess capital in the most sustainable and efficient manner," Glencore chief
executive Ivan Glasenberg said in the earnings statement.
"As the most diversified raw material producer and marketer, Glencore is well positioned to react to and benefit from changes in commodity
fundamentals," he added.
The company's board aims to propose hiking the dividend paid to shareholders by nine percent to 18 cents a share, the company said.