Eighty coal jobs gone in Queensland
Eighty jobs will be eliminated at the Glencore's Collinsville coal mine located in the northern part of the Queensland Bowen Basin.
The cuts, which were announced Wednesday, amount to about one-quarter of the company's workforce.
Production will be also be reduced by two million tonnes.
The company said the cuts were being made due to difficult market conditions, which Glencore calls "historic".
“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,” said Glencore spokesman Francis De Rosa.
“We expect Collinsville will continue to operate at reduced capacity for the remainder of 2015 as we investigate alternate marketing opportunities and revise mining plans."
The company said it is offering support to employees and will redeploy where possible.
Collinsville produces coking and steaming coal. It's a joint venture between Xstrata Coal (55%), Itochu Coal Resources (35%) and Sumitomo (10%). It's an old mining site with underground production beginning as far back as 1919. Xstrata acquired the operations in 2003.
In speculating about the closure, The Financial Times wonders if the reduced production is just part of the normal rise and fall of commodity prices or something larger is at play. Future demand from China will be crimped by pollution controls. The country has also enacted coal tarriffs. From investors, there has been a move to pull money out of coal to disfavour polluting forms of energy production.
But the big question ahead is whether or not coal is sitting at a nadir of a typical boom-bust cycle or if something more tectonic is in play. The issue for Collinsville is not so much what it costs to dig coal there or the price that its black stuff attracts when it goes to market. Rather, the problem at Collinsville is that too few buyers want its coal.