Mine workers emerge from pitheadIn response to the weak coal price and slumping global economy, commodities company Glencore is considering shutting down some of its coal operations in South Africa, a move that will put about 1 070 local jobs at risk.

Glencore has indicated that production at its Optimum Coal Mines unit could reduce by at least 5 Mtpa, although it could be put back into production if the coal price improves. The company’s underground coal mining operations in the country, however, should remain unaffected. “Glencore continues to review all coal operations in the prevailing economic climate,” the company said.

The loss of jobs and production would negatively contribute to South Africa’s challenges against unemployment, poverty and economic concerns. “The coal mining sector is under stress and one has to see how the industry works through the challenges,” said Roger Baxter, a senior executive at the South African Chamber of Mines.

Weak coal and copper prices have already taken their toll on the company. Recently, as copper prices plunged to a 5-year low, Glencore saw its stock levels collapse to the lowest level since 2011. Furthermore, the decrease in demand from China has negatively affected the coal price, as well as the prices of other commodities, particularly copper and iron ore.

Glencore is the world’s largest exporter of seaborne thermal coal and South African's third largest coal exporter used to generate electricity and one of the largest producers of coal used to make steel and other industrial applications.

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