Swiss-based coal miner Glencore announced on Monday that it will resume its coal mining operations in Australia which were temporarily halted due to the global oversupply of the commodity that has pushed prices well below peak.
The company said that the three-week break was necessary in order to avoid more drastic measures, including closing those or other mines for much longer.
According to Mining.com, Glencore’s Christmas break in production was designed to create an artificial tightness in the thermal coal market which traded the commodity at just over $63 a tonne when the company’s shutdown began in mid-December.
The company’s CEO Ivan Glasenberg last year criticised Major iron ore players, including Rio Tinto, BHP Billion and Vale, for squeezing themselves by ramping up production at a time when commodity prices and Chinese demand are falling.
“We don’t want to oversupply and cannibalise our own business. If we do generate cash and we don’t find better ways to deploy it, we are owner-managers and we are happy to pay back some money to ourselves,” he said.
Last year Glencore was involved in an unsuccessful attempt to merge with Rio Tinto but is expected to make another move for it in April in accordance with UK takeover laws.
According to the Business Insider, both parties have reportedly considered a joint venture over Rio and Glencore’s Hunter Valley coal operations.
Glencore is Australia’s top coal producer with 20 coal mines at 13 mine complexes across NSW and Queensland and an annual production of 80 million tonnes of thermal and coking coal.