Glencore halves coal output as costs rise and prices dip
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