MINING giant Glencore is currently in talks with its Hunter Valley workforce to discuss ways to cut overall coal production.
The company delivered its half yearly results last night, which showed Newcastle thermal coal returns for the year to date were down 30 per cent.
As a result of this, the company is looking at cutting 7 million tonnes from their production which in 2019 was 111Mtpa.
To achieve this cut in production a company spokesperson says they will not have a blanket shutdown as the production profile at each mine site is different, therefore some sites will 'park up' equipment and other will n out need to take any action at all.
In 2015, during the last downturn in the coal market, Glencore cut production by 15 per cent.
Bloomberg has reported that the world's largest thermal coal exporter capped production last year, and said recently it would cut back in light of oversupply. Glencore has resisted more dramatic strategic moves, arguing the material can recover, given limited new supply and Asian demand, and remain profitable, and that it doesn't make up enough of its earnings to scare investors.
With demand in places like Vietnam looking less bright, and ESG pressures only increasing, that's a challenging argument to defend they reported.
The Glencore decision follows Peabody's move to have a partial shutdown of its Wambo underground mine for six weeks.
Comment has been sought from Peabody as to whether further action will be taken at their Wambo mine to reduce overall production.
And, this week, it was reported the Bloomfield Group had applied for the federal government's Jobkeeper wages payment for staff at their Rix's Creek Mine and Kings Engineering business.
The question has to be asked, given the current state of the thermal coal market, why would these mining companies continue with eight major continuation/expansion projects and one new underground mine for the Upper Hunter as stated in the NSW Minerals Council's recently released report?