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Glencore cuts further 340 jobs as coal prices drop

The company is closing depleted coal mines to withstand a downturn in commodity prices.
Glencore is cutting a further 340 jobs in South Africa as the company closes depleted coal mines to withstand a downturn in commodity prices.

Glencore has eliminated 240 jobs at its South Witbank coal mine in the eastern Mpumalanga province and it plans to cut as many as 100 positions at the nearby Witcons coal-processing plant, the company said in an e-mailed response to questions on Wednesday.

Glencore has cut sections of its Optimum Coal unit this year, laying off 630 workers, responding to a more than 40% slump in coal prices since the start of 2014. Optimum Coal is currently undergoing the local equivalent of bankruptcy protection proceedings. Glencore also plans to shut its Eland platinum mine, putting about 1,000 jobs at risk. Platinum prices have dropped almost 50% since 2011. Glencore employs about 35,000 people in South Africa.

Glencore’s shares plunged 29% on Monday amid concerns over the company’s debt, before recouping most of the loss by Wednesday after reassuring investors it had good liquidity. Even still, the company has lost more than two-thirds of its market value since March.

The drop in commodity prices adds to the challenges of power shortages and policy uncertainty that miners are also struggling to deal with in South Africa, the world’s largest platinum and manganese producer.

More than 22,000 mining jobs are at risk in the country, according to the National Union of Mineworkers, as companies including Anglo American, Impala Platinum Holdings and Lonmin try to lower their costs.

©2015 Bloomberg News

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