<article><p class="lead">Around 84 contractors will be laid off at the Hunter Valley Operations (HVO) coal mine in New South Wales (NSW), Australia, that is owned by Chinese-Australian coal firm Yancoal and UK-Swiss mining company Glencore, as the firms adjust to lower coal demand during the Covid-19 pandemic.</p><p>The firms are implementing a new mine plan at HVO that will require fewer mining, coal preparation and maintenance workers from January. It is unclear what impact this will have on production, but it may become clearer when Glencore, which operates the mine, gives its investor update on 4 December. </p><p>Australian coal mines have been affected by a Chinese ban on imports of Australian coal and by lower demand from countries outside of China struggling to recover from the pandemic.</p><p>Glencore has already cut its 2020 production forecasts twice this year by <a href="https://direct.argusmedia.com/newsandanalysis/article/2130883">18mn t to 111mn-117mn t</a> in August, which included 7mn t of production cuts in Australia because of a 2-3 week closure of its operations in September-October, and by a further <a href="https://direct.argusmedia.com/newsandanalysis/article/2155302">5mn t in October</a> because of continuing strikes at its Cerrejon mine in Columbia.</p><p>Yancoal has <a href="https://direct.argusmedia.com/newsandanalysis/article/2151700">maintained its production guidance</a> of 38mn t for 2020, despite the three-week closure of HVO between 25 September and 12 October. </p><p>Run-of-mine production at HVO was 4.1mn t during July-September, down by 7pc from the previous quarter and by 16pc from the year-earlier period. Yancoal owns 51pc of HVO, with Glencore holding the remainder.</p><p><i>Argus</i> last assessed high-grade Australian thermal coal at $59.02/t fob Newcastle on 13 November for NAR 6,000 kcal/kg, up from a low of $46.18/t on 7 September but down from $65.70/t at the start of the year. It assessed lower-grade coal at $37.63/t fob Newcastle for NAR 5,500 kcal/kg, up from a low of $35.04/t on 7 September but down from $51.52/t at the start of the year.</p><p class="bylines">By Jo Clarke</p></article>
