Brazilian mining major Vale and Japan’s Sumitomo Corp are placing their Isaac Plains 50:50 coking coal joint venture on care and maintenance, due to unfavourable coal prices.
Vale said it was taking the “necessary steps” to place Isaac Plains into care and maintenance, saying that the operation was not “economically viable under current market conditions'”.
The miner said halting operations at the Bowen Basin, Queensland, mine had been agreed with joint venture partner Sumitomo Corp.
“The decision is consistent with Vale’s strategy to focus on discipline in capital allocation and maximising value for its shareholders,” Vale said.
The move is the latest in a round of cuts among coal miners in Australia, who are struggling to remain competitive in a severely depressed pricing climate.
Last week coking coal mining major BHP Billiton Mitsubishi Alliance (BMA) announced 700 jobs cuts across its coking coal operations in Australia.
Steel First’s premium hard coking coal index fob Australia’s DBCT port has lost more than 15% of its value since the beginning of 2014, falling to levels of around $113 per tonne in the last week of September from over $133 per tonne at the beginning of the year.(Edited by SteelFirst)