Glen­core halves coal out­put as costs rise and prices dip

CityPress - - Business -

In­ter­na­tional com­mod­ity trad­ing and min­ing group Glen­core more than halved its coal pro­duc­tion in South Africa over the course of last year.

The drop was mostly due to the Op­ti­mum col­liery en­ter­ing busi­ness res­cue in Au­gust, but a large amount of other pro­duc­tion has ev­i­dently also been canned.

Glen­core’s pro­duc­tion re­port for 2015 was re­leased on Thurs­day, re­flect­ing the ef­fect of fall­ing prices for vir­tu­ally ev­ery­thing the com­pany trades in. In the last quar­ter of 2015, the com­pany pro­duced 5.2 mil­lion tons of coal in South Africa, ac­cord­ing to the re­port. The com­pa­ra­ble fig­ure for 2014 was 11.7 mil­lion tons.

Pro­duc­tion in 2015 was 37 mil­lion tons, com­pared with 46.1 mil­lion tons in 2014. There was also a 24% drop in the av­er­age price ther­mal coal from South Africa fetched in the ex­port mar­ket to $52 (R825) per ton.

Lo­cal coal prices, which largely re­flect pur­chases by Eskom, rose 4% to $24 per ton.

Glen­core’s other ma­jor pres­ence in the coun­try, through its 79.1% share in the Mer­afe fer­rochrome ven­ture, boosted its pro­duc­tion by 13% due to the ramp-up of the Lion II fer­rochrome smelter, which came into pro­duc­tion in 2014, the com­pany said.

– De­wald van Rens­burg

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