The South African government ordered a coal mine to close due to its plans for job cuts.
Glencore announced last month that it would cut 380 positions at its Optimum mine in South Africa and shutter some operations, a move it first raised in January.
The miner stated that its position was difficult due to the fact it was supplying state power firm Eskom with thermal coal at a cost lower than production, Reuters reported.
“Optimum is contracted to supply 5.5 million tons per annum to Eskom following an agreement signed in 1993; this agreement has resulted in Optimum supplying coal to Eskom at a cost significantly less than the cost of production for a number of years,” Glencore explained in a company statement.
Following this announcement S.A. mines minister Ngoako Ramatlhodi said the operation should be closed down entirely as Glencore did not follow proper legal processes in its workforce reduction procedures.
“The retrenchments … were inhumanely conducted and disregarded all the legal prescripts which govern the process of retrenchments,” Ramatlhodi said.
He then told Reuters the government planned to suspend all operations at the Glencore mine until the job loss issue was determined.
Since then he called for “an urgent meeting of leaders in the mining industry to address the issue of job losses”, citing the announcement by Glencore and others to retrench workers.
Glencore has refuted the South African Department of Mineral Resources comments, stating the Optimum mine has complied wiht all legal requirements relating to the retrenchment process, including extensive consultation with both the Government and unions.
"Optimum extended the 60 day legislated consultation process with unions and affected employees to over 150 days," it said in an official statement.
"Glencore has agreed to provide funding to Optimum to enable Optimum to pay the full retrenchment cost as tabled at the CCMA and offered assistance to the affected employees through retraining programs to enable them to plan for the future. This includes training in areas such as portable skills and financial management.
"The retrenchment packages offered are above those regulated in the Labour Relations Act. Through various engagements and company initiatives the impact has been significantly mitigated.
"Out of an expected 1067 employees to be retrenched, approximately 359 employees have been retrenched. About 267 opted for voluntary severance packages and 86 were redeployed to other Glencore operations."