Glencore cuts Australian coal output on weak demand, supply glut

Mining and commodities giant Glencore Xstrata Friday said it was reducing its coal production in Australia by 15 million tonnes amid weak global demand and oversupply. It is understood that up to 120 jobs at Glencore's 13 Australian mines could be affected as a result of the cuts, which will include scaling back some operations and deferring projects. The announcement follows the Swiss company's decision to shut its mines for three weeks over the Christmas period. "We plan to reduce 2015 production by 15 million tonnes to more closely align our coal output with current customer demand," Glencore, which produced just under 100 million tonnes of coal in Australia last year, said in a statement. "We will continue to review all our coal operations in the prevailing economic climate." Glencore did not say which mines would be affected. The firm has 8,600 workers at mines in the Australian states of New South Wales and Queensland. Other major miners such as BHP Billiton and Rio Tinto have continued to ramp up their production levels -- particularly in iron ore -- despite plunging commodity prices. Glencore chief executive Ivan Glasenberg was reported to have said in December that "we don't want to oversupply and cannibalise our own business" in a criticism of other miners. Rival Rio Tinto, which posted a 78 percent rise in 2014 annual net profit to US$6.53 billion earlier this month, said Friday it was merging its copper and coal divisions as part of an ongoing cost-cutting drive. Brazilian iron ore major Vale on Thursday reported a full-year net profit for 2014 of US$657 million. It was a 12.5 percent increase from the previous year but far below analysts' expectations. The mining giant said revenue in 2014 fell 19.5 percent to US$38.2 billion, mostly due to lower iron ore prices. And BHP Billiton on Tuesday said its net profit for the six months to December 31 almost halved to US$4.26 billion on the back of collapsing commodity prices.