Glencore axes 1600 jobs worldwide; shares plunge by 30%

By @Shayani92 on
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The logo of commodities trader Glencore is pictured in front of the company's headquarters in Baar, Switzerland, September 30, 2015. Lenders remain supportive of embattled commodities trader and mining company Glencore , which has around $13 billion of liquidity available and can finance its debt maturities for two years, sources familiar with the situation said on Tuesday. Reuters/Arnd Wiegmann

Following BlueScope’s job cuts and wage freeze, mining and commodity company Glencore has announced it will cut as many as 535 jobs at its zinc mines in Queensland and the Northern Territory. This move will result in the loss of 1600 jobs worldwide.

The company announced it would suspend operations at the Lady Loretta mine in Queensland, which will result in the cutting of 242 jobs, reported the ABC. It will also reduce its production at the McArthur River mine in the Northern Territory, cutting almost 69 positions, and at the George Fisher Mine in Mount Isa region, with 224 positions to. Of the 535 jobs cut, almost two-third of the positions are fly in and out jobs.

On Friday, Glencore announced it would reduce its Zinc production by a third, which is equivalent to  500,000 tonnes per year, in Australia as well as in South America and Kazakhstan. It is believed that the sudden production reduction was done in a bid to preserve the value of zinc reserves amid tumbling prices of lead and zinc.

In a statement, the company said production management was necessary in the present climate, but that it remains quite positive regarding the future of zinc, lead and silver.

"In the coming days we will engage with all employees and put in place support services to assist our people who may be affected as a result of these changes," the statement said.

Meanwhile, the company has decided to provide voluntary redundancies and offers of redeployment to its workers.

George Fisher Mine General Manager Chris McCleave informed the site's workers about the decision earlier on Friday. "It's a tough day to give the news, and no doubt it's a tougher day to hear this news," he said. Glencore’s shares have plummeted by 30 percent since September amid its debt crisis. In the wake of reducing its US $30 billion (AU $40.91 billion) debt, resources analysts believe that it would restructure all its project by cutting down costs.

However, the decision is a severe blow to the Mount Isa community, said Queensland Premier Annastacia Palaszczuk. "I think today is the culmination of global impacts of downturn in commodity prices which we are seeing a number of companies facing," she added.

Mount Isa Mayor Tony McGrady said that it was an “international problem that is certainly not exclusive to our region.”

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