Glencore has put a number of its opencast operations, and large portions of the coal processing plants, at its Optimum colliery, in South Africa, on care and maintenance and is retrenching 600-700 workers. This comes as the company commences “business rescue” proceedings for Optimum.
Optimum supplies coal to the Hendrina power station owned by State electricity generator, ESKOM, in terms of a 1993 contract. Optimum maintains that the mine supplies coal at a price significantly less than the cost of production and has sought a renegotiation of the contract with ESKOM. According to Glencore, ESKOM has been unwilling to consider renegotiations and so, in the light of “continued and unsustainable financial hardship”, the coal producer will allow an independent party to assess Optimum’s financial position and contractual obligations and determine how best to rescue Optimum.
Glencore closes South African coal mine: GLEN