Latest reports from Sydney bring in announcement by coal miner, Glencore Plc. – keeping in view bearish coal cost; the company is likely to close its Tahmoor underground coal mine in eastern Australia by year 2019.
INSIGHT: The mine has been operational since year 1979.
The announcement brings in [yet] another astonishment on behalf of largest coal suppliers that has been putting in every effort to secure its profit range due to ongoing turmoil of global coal slump; multiyear bears.
Exclusive data obtained from The Guardian cite (for readers’ concern):
Global metallurgical coal prices have plunged from more than $300/tonne in year 2011 to around $94/tonne in step with weakening steel prices (source: Reuters).
Moreover, in one of the most glaring examples of exiting coal at any cost, Brazil’s Vale, sold a mothballed coalmine in Australia to a local operator for $1. At peak coal prices, the mine was worth around $500 million.
On Tahmoor deposit, the miner produced nearly 2.1 million metric tons of steelmaking coal in year 2015.
“The decision has been made as a result of continued low prices in global coal markets, which has meant the economic return from reserves still available at Tahmoor are not sufficient to warrant the investment required to mine them.” Glencore in an official statement
UPDATE: On a related note, Glencore stated to experience a staff cut worth 350 employees — within upcoming 18 months — at Australia’s New South Wales state’s mine.
