August 10, 2020 Read More →

Glencore plans massive production cut to curb global oversupply

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Australia’s largest shipper of thermal coal, Glencore, will embark on an approximate 7 million-tonne cut to its Australian coal production in 2020 to help rebalance the oversupplied global market.

Glencore’s Australian operations produced 58.1 million tonnes of coal in January-June 2020, down 15 per cent on 68.2 million tonnes in the first half of 2019, the company said in its half-year update.

Chief executive Ivan Glasenberg said at the company’s results presentation it was taking steps to manage its coal production in Australia with measures including temporary site and equipment shutdowns at a number of its coal operations.

Energy markets analyst Tim Buckley, a director at pro-renewable think tank the Institute for Energy Economics and Financial Analysis (IEEFA), said the Australian coal industry was in a difficult position and has been hit by three factors.

Firstly, a normal cyclical market downturn. Secondly, the COVID-19 pandemic which has caused demand destruction for coal. Thirdly, a long-term structural decline as Asian economies pivot to non-fossil fuel technologies for power generation.

[Mike Cooper]

More: Possible silver lining for thermal coal from Glencore production cut

Posted in: IEEFA In the News

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