Roughly 8,000 of Glencore’s coal employees will be forced to take three weeks of annual leave over Christmas after the operator announced it will be shutting its mines over the period.
Driving the decision is an oversupply of coal and weak commodity prices, a Glencore spokesman said.
The company estimates closing its Australian mines will result in reduced output of about 5 million tonnes.
The shut-down will run from mid-December until the new year. Under the current workplace agreement Glencore is required to give workers 28 days notice of the decision.
It is understood a number of employees who don’t have enough annual leave will be asked to use leave in advance. There could also be an option to take leave without pay.
Glencore said, “This is a considered management decision given the current oversupply situation and reduces the need to push incremental sales into an already weak pricing environment.”
“We remain confident in demand growth for our products and believe that the supply and demand balance will be restored in the medium term,” the company said.
Overnight Newcastle coal closed at $64.10 a tonne for December – well below the $US120 a tonne it was fetching three years ago.
Glencore employs about 8,600 workers across its Australian coal operations.