Xstrata Plc cut 230 jobs, shut down major coal mining section in Australia
Xstrata Plc has shut down half its coking coal production at a mine in Australia, the latest cutback by miners in the country as a slowdown in global steelmaking slashes demand for coal and other raw materials.
London-listed Xstrata suspended mining of the longwall at its Oaky Creek Number One project in the northeastern state of Queensland, it said in a statement.
Oaky Creek Number One last year yielded 6.2 million tonnes of coal out of a total of 11 million tonnes at the overall complex, Xstrata said.
“It is an unfortunate downturn but it is in direct response to the market. It is a tough market environment for the industry which isn’t immune to the credit crisis,” said James Rickards, communications manager at Xstrata Coal.
Demand for metallurgical coal, dependent solely on purchases from steel mills, has been particularly hard hit by the global financial crisis as steel makers slash production.
China’s once-bustling steel mills have cut production by a fifth since the global financial crisis hit its economy a few months ago.
“Until now it’s mostly been the iron ore producers scaling back,” said Patterson Securities analyst Andrew Harrington. “But with the steel industry in such bad shape at the moment, you’d have to expect coking coal companies to be hit hard too.”
Australia’s government cut its forecast for the country’s metallurgical coal production in 2008/09 by 5 percent on Monday to 146.6 million tonnes, and said the outlook for steel and steel-making raw materials had deteriorated in the past three months.
Xstrata’s decision would result in the loss of 190 contracting positions and 40 permanent jobs, the company said.
From MineWeb
