Glencore has taken over management of the Clermont open pit coal mine in Queensland after buying Rio Tinto’s 50 per cent stake in the mine for more than $1 billion last year.
Glencore said the decision to purchase Clermont reflected the company’s focus on developing high quality assets that complement existing operations and market capabilities.
“It is a producer of high energy thermal coal, with minimal capital requirements,” a Glencore spokesperson said.
However, with thermal coal hitting close to four-year lows last week at $74.33 a tonne, Glencore’s immediate priority at its new site will be a review of operation as part of what it calls the integration process.
The company said it will look to find synergies in production and marketing with its existing Queensland operations.
In announcing the acquisition last year, Glencore coal boss Peter Freyberg said Clermont was “structurally low-cost”.
The mine, which only opened in 2010, is expected to produce more than 165 million tonnes of coal over the next 16 years.
It currently produces around 12 million tonnes a year.
Last week, Glencore decided to close its Newlands northern underground mine in 2015 rather than extend the operation’s mine life in the current depressed coal market.
Rio Tinto chief financial officer Chris Lynch said the sale of Clermont Mine will allow the company to continue in the optimisation of its portfolio.
“It also demonstrates our focus on strengthening our balance sheet and taking a disciplined approach to allocating capital across the group,” Lynch said.
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