Xstrata Coal to Restructure Coal Operations in Australia

Xstrata Coal, a global exporter of thermal coal, has announced changes to its coal operations in Australia.

The company has embarked on this restructuring initiative to address factors including high input costs, low price of coal and the rising value of the Australian dollar.

Xstrata Coal produces around 100 million t of coal, annually, from 30 mines in Australia, Colombia and Australia. The Sydney-based company was founded in 2002 and employs over 17,000 people, including contractors.

The company has announced that it will be reducing its employee force by around 600, which is based on its cost savings objectives that it had reported at its half-year earnings announcement. The reduction in count will include permanent employees as well as contractors.

Xstrata Coal plans to reduce the production cost of coal which is quite high at some of its mines. To achieve this objective, it is reducing its employee count. The company is consolidating its Queensland office-based operations and is also reducing some count in its Sydney corporate headquarters. The company does not expect any impact to its volume of material production in Australia.

Xstrata Coal reports that it is continuing the feasibility studies for its Wandoan Project. Based on market conditions and approvals it will decide on the investment to be made. The company’s Ravensworth North and Ulan West growth projects and its Rolleston expansion are progressing on schedule and within the budget.

Xstrata Coal also announced that it will continue to review the business operations in order to maintain its competitive cost position in the coal market.

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