Iron ore price weakens as Australia flags return to sub-$100 prices
Futures dropped for a fourth day in Singapore, to trade about 3% lower for the week.
Ravensworth coal mine.
Glencore Xstrata (LON:GLEN) said Thursday it will close its Australian Ravensworth underground coal mine in the Hunter Valley, as prices for the commodity continue to fall and the market is experiencing a stock surplus.
With thermal coal prices slumping close to four-year lows and coking-coal prices near their lowest level since 2007, the company said it was simply no longer financially viable to operate the mine.
The mine, Reuters report, will be placed under care and maintenance in September after work on a longwall section, affecting about 130 workers.
The company has already laid off 17 workers at the site, with a further 113 at risk of redundancy as the mine approaches closure, planned for September.
Ravensworth is a joint venture between Resource Pacific Pty. Ltd., a company owned by Glencore Xstrata and Marubeni Corp., and South Korean steelmaker Posco.
Since 2011 declining coal prices have forced miners such as BHP Billiton and Anglo American PLC to review their operations, resulting in staff cutbacks, shelved expansion plans and asset sales. BHP, which through its partnership with Mitsubishi Corp. is the world’s largest coking-coal exporter, has already closed several mines, including its Norwich Park and Gregory operations in eastern Australia citing weak prices.
Image courtesy of Glencore Xstrata
Comments
Adam Lucas
Anton and klgmac, you are deluded. It has nothing at all to do with carbon regulation in Australia, and everything to do with demand from China and India. the world economy is slowing, as is growth in China and India, and Chinese government policy on coal consumption, imports and renewable energy are putting downward pressure on prices. The price on carbon in Australia was repealed earlier this year, and has made ZERO difference to coal prices or the future prospects of coal in Australia.