REPORT: Glencore to Shut Down South Africa Coal Mine, Lay Off Workers
Swiss-based commodities trader Glencore PLC is expected to shut down some of its South African coal operations as global prices for coal continue to evaporate.
The company's coal subsidiary,Optimum Coal Mines, said in a statement it could reduce production by at least five million tons per year, which is half of the unit’s annual production rate, and lay off as many as 1,070 employees. The company has already informed South Africa’s mineral resources department and relevant unions of the potential closures.
Glencore said underground coal mining operations will remain open, which supplies coal to Eskom’s Hendrina Power Station, and would consider reopening the mine if commodity prices improve. “Glencore continues to review all coal operations in the prevailing economic climate,” the company said in a statement.
The past year has seen coal prices take a pounding as China’s demand for the black gold has shriveled. Earlier this week, Anglo American announced it plans to sell some of its coal assets in Australia, including South Africa, to reduce capital expenditure.
Optimum has already begun discussions with labor unions over the planned layoffs.
This is the second time in a month that Glencore has suspended operations at coal mines. In December, it temporally shut down all of its Australian coal mines.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.