Glencore to Restart Australia Coal Mine as Prices Surge
Glencore said on Tuesday it would restart a coking coal mine in southeastern Australia that was shuttered more than two years ago, with a resurgence in prices for the commodity breathing new life into the sector.
Less than a year after the coal industry was declared to be in terminal decline, markets for coal used to generate power and make steel have surged - boosted by moves in China to mine less of its own coal and import more.
Glencore (GLCNF) acquired the underground Integra mine, formally called Glennies Creek, in 2015 after it was mothballed by then owner Vale of Brazil. It plans to restart it early next year.
"The Integra underground mine has been on care and maintenance since July 2014 and Glencore has continued to assess options for a restart against global coal market conditions," the company said.
The mine is expected to yield 1.3 million tonnes of coal in 2017, according to Glencore.
The unprecedented surge in coal prices in the past few months to more than double their June levels is a big fillip for Glencore and other coal miners.
Peabody Energy Corp and Nippon Steel last month set the fourth quarter metallurgical coal contract benchmark at $200 a tonne, more than twice the price of the previous quarter.
Glencore said in October it would rehire about 200 workers at its Collinsville coal mine, also in Australia, after cutting 180 jobs to combat weak pricing.
China has cut working days on coal mines to 276 days from 330 days to remove excess capacity, leading to higher demand for imports.
Reporting by James Regan