A significant fall in commodity prices has forced a multinational coal producer to downsize its workforce.
The Glencore-Yancoal Joint Venture has confirmed it will retrench several contract workers at its Hunter Valley Operations (HVO) Mine in Lemington, 102km northwest of Newcastle.
The JV blamed the worldwide pandemic for causing a “prolonged downturn” that forced it to farewell part of its workforce. Coal spot prices fell by 33.1 per cent to US$50.48 (A$69.1) a tonne between January 13 and August 24, according to the Trading Economics website.
“Hunter Valley Operations has initiated discussions with the mine’s workforce on changes that will be made to the coal processing requirements from January 2021 as a result of ongoing economic and energy demand impact arising from the COVID-19 pandemic,” Glencore said in a public statement obtained by Reuters.
Glencore promised no permanent workers would be retrenched for now.
“The changes will not impact HVO’s permanent workforce numbers but some contracting roles in the mining, coal preparation and maintenance areas will not be required under the revised production plan,” the company said.
Federal Resources Minister Keith Pitt recently revealed on Twitter that Glencore directly employs more than 10,000 workers through coal plus a further 70,000 people indirectly.
Glencore previously revealed it would implement temporary site and equipment shutdowns at several coal mines, potentially including both its Townsville Copper Refinery and Mount Isa Copper Smelter.
At the time the proponent blamed soaring electricity and gas prices, which affected the profitability and long-term viability of work sites.
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If management takes no action, rising operating expenses could force operations to close as early as 2022. Such a shutdown would impact on up to 3440 employees who work across all copper operations according to Glencore’s latest corporate profile report.
The company also faces an additional $40 million expense for rebricking its Mount Isa Copper Smelter. The Queensland Government has already contributed $15M towards the project.