Glencore latest to cut coal jobs owing to Transnet’s dismal performance

GLENCORE is to retrench staff at its iMpunzi coal mine in South Africa’s Mpumalanga province as logistical woes linked to Transnet depressed exports, said News24.

The publication cited a letter from iMpunzi complex GM Hlayiseka Chauke saying Transnet Freight Rail’s (TFR’s) poor performance drove its decision to retrench up to 214 employees. The mine has 1,138 permanent employees and 10 fixed-term employees, said News24.

“Although TFR’s performance continued to be poor in 2022, the high coal prices made it fairly sustainable to truck coal to Maputo, Durban and Richards Bay ports,” Chauke said in the letter.

“This has changed in recent times as the coal price has also dropped from an average of over $200 per ton during 2022 to a year-to-date average of around $100 per ton,” he said. “This directly impacts iMpunzi Complex in that there are insufficient trains available to move all the export product to the port, and trucking has become economically unsustainable due to lower prices.”

Although the Arthur Taylor Colliery plant at iMpunzi is contracted to supply Eskom with 140,000 tons of coal per month until December 2024, Chauke was quoted as saying in News24’s article that TFR’s poor performance had made it economically unsustainable for iMpunzi Complex to produce at optimal levels. The plant is also old and needs continuous maintenance.

News24 reported on September 20 that Seriti Power was considering laying off around 600 employees at its Klipspruit colliery in South Africa’s Mpumalanga province.

Citing a letter by the mine’s manager, News24 said a combination of Transnet woes, a decline in domestic coal prices and related operational issues had sent Klipspruit’s delivered cost to R1,314 per saleable ton. Set against this the current average domestic coal price is R400/t, a fifth below the mine’s budgeted R500/t.

While export prices have recovered to above $100/t – higher than the mine’s budgeted price – Seriti had difficulties shipping sufficient export volumes. It is also burdened by the cost of sending more material to the domestic market as a result.