GLNCY Glencore Plc (PK)

   By Rhiannon Hoyle 
 

SYDNEY--Glencore PLC (GLEN.LN) said it will ax nearly 80% of the workforce at its Collinsville coal operation in eastern Australia, as it dials back mining at the site next year.

The Switzerland-based resources company said that in 2016 it will ramp down activity to dig up fresh coal at the mine in Queensland state's coal-rich Bowen Basin, and instead focus on selling existing stockpiles. Roughly 180 of the 230 jobs at Collinsville will be cut, with layoffs beginning in March, said Glencore.

The cutback follows a sharp fall in the price of thermal coal, used to generate electricity, as demand from major buyers such as China has faltered. The fuel's value has fallen by nearly half over the past two years.

"The situation at Collinsville reflects the challenges being faced by all Australian coal mines in one of the most difficult markets in the industry's recent history," a spokesman for the miner said in an emailed statement. "It is a particularly difficult decision given the significant effort and the improvements made at Collinsville by Glencore and the entire workforce over the last two years in attempting to turn around the mine's financial position."

It said that despite cost-cutting efforts, the mine has been unprofitable this year.

Glencore said it would reassess its plans for the operation during 2016, and signaled it was keeping all its mines under review amid the downturn in world commodity prices. Glencore is the world's largest shipper of thermal coal.

"Glencore will continue to take proactive steps to manage our coal business in the current commodity pricing environment," the spokesman said.

Glencore also has been cutting output at other operations, including its zinc and copper mines, after a sharp fall in the prices for those commodities.

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

(END) Dow Jones Newswires

December 06, 2015 23:51 ET (04:51 GMT)

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