Coal-mining job cuts expected in response to global glut
Peabody plans to cut about 450 contractor jobs, while Glencore Xstrata will lay off about 46 employees at its Ravensworth coal mine in the Hunter Valley.
Engineering and mining services company Downer EDI will cut 185 jobs from the Goonyella Riverside coal mine in Queensland.
Anglo American chief executive Mark Cutifani told a forum in Canberra the outlook was grim as mining companies adapted to lower prices and weakening demand.
Prices for thermal coal, used for power generation, have fallen more than 30 per cent in the past two years to about $US80 ($86) a tonne, while prices for coking coal, used for steel making, have dropped about 40 per cent in the past year to about $US130 a tonne.
Peabody said the cuts would take place across its operations in the coal-rich eastern Australian states of Queensland and New South Wales, where it produces both coking and thermal coal.
Xstrata's job cuts would reduce Ravensworth's mine workforce by about 26 per cent, with about 130 employees remaining.
The company said the cuts were in response to "tough" conditions caused by low coal prices, high costs and a high Australian dollar.
Ravensworth general manager Tony Galvin said the decision reflected the commercial realities faced by the mine. "We are making tough decisions to remain viable during these challenging economic times," Mr Galvin said. The mine produced about 2.2 million tonnes of mostly coking coal last year.
Glencore Xstrata has cut about 700 jobs since late last year, about 100 more jobs than it said it planned to eliminate.
"It does look pretty grim, certainly for the thermal coal industry," Mr Cutifani said.
Frequently Asked Questions about this Article…
The article says a global glut in coal supply has pushed prices down and weakened demand. Mining companies are responding to lower thermal and coking coal prices, high operating costs and a strong Australian dollar by cutting jobs to stay viable.
Peabody Energy Corp, Glencore Xstrata and engineering and mining services firm Downer EDI are named. Anglo American’s chief executive also commented on the grim outlook for the sector.
Peabody plans to cut about 450 contractor jobs across its Queensland and New South Wales operations. Glencore Xstrata will lay off about 46 employees at its Ravensworth mine (a reduction of roughly 26% leaving about 130 employees), and Downer EDI will cut 185 jobs at the Goonyella Riverside coal mine in Queensland.
Thermal coal prices used for power generation have fallen more than 30% over the past two years to about US$80 (around $86) a tonne. Coking coal prices used in steel making have dropped about 40% in the past year to roughly US$130 a tonne.
The article explains thermal coal is primarily used for power generation, while coking coal is used for steel making. Both types have seen significant price declines, affecting mining operations and jobs.
Anglo American chief executive Mark Cutifani told a forum in Canberra the outlook was grim, noting mining companies are adapting to lower prices and weakening demand.
The Ravensworth mine produced about 2.2 million tonnes of mostly coking coal last year. The announced job cuts reflect the mine’s need to make tough commercial decisions during challenging economic conditions.
Based on the article, investors should monitor coal price trends (thermal and coking), company updates on production and workforce changes, cost pressures and currency effects like a strong Australian dollar—these factors are being cited as drivers behind the recent job cuts.
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