Switzerland-based mining and trading firm Glencore will temporarily shut 5mn t of coal production in Australia for a three-week period from mid-December. The move will affect all of Glencore's coal output covering thermal, hard coking coal and semi-soft coking coal.
The move was because of the current oversupply situation and reduces the need to push incremental sales into an already weak price environment, Glencore said today.
"We remain confident in demand growth for our products and believe that the supply and demand balance will be restored in the medium term," it said.
Coal prices have fallen significantly during the past 18 months. Newcastle 6,000 kcal/kg fob prices were last assessed by Argus at $61.67t, down 17pc from the start of May and down 25pc during the past year.
Glencore's Australian thermal coal production was 17.9mn t in the July-September quarter, or 19.3pc higher than the same period in 2013. Glencore produced 1.7mn t of hard coking coal from its Australian mines in the same period, a 6pc fall from the same quarter the previous year. The group's total hard coking coal output for the first nine months of 2014 was 4.6mn t, an 18pc fall from the same period in 2013.
Semi-soft coking coal production at Glencore's Australian mines totalled 700,000t during July-September, down by 30pc from the third quarter of 2013. Its total semi-soft coking coal output was 2.5mn t for the first nine months, down by 24pc from a year earlier.
Glencore operates 13 coal mines across New South Wales and Queensland and employed 8,600 workers in 2013 with production of more than 80mn t/yr.
km/rjd
Send comments to feedback@argusmedia.com
If you would like to review other ArgusMedia.com content options, request more information about Argus' energy news, data and analysis services.
Copyright © 2014 Argus Media Ltd - www.ArgusMedia.com - All rights reserved.
