(Bloomberg) -- South African coal miner Seriti Resources said it plans to cut as many as 1,137 workers across two opencast operations because the mines are unprofitable.
The Middelburg Mine Services and Klipspruit South-East mines “are not currently commercially sustainable and require material restructuring to improve unit costs,” the company said in a statement. The operations have been impacted by factors including the poor performance of state-owned rail firm Transnet SOC Ltd and market volatility, it said.
South African coal miners missed out on some windfall profits after Russia’s invasion of Ukraine boosted European demand for alternative energy sources. Coal shipments by Transnet from inland mines to the country’s main export terminal on the coast have sunk to the lowest level in decades, crimping sales of the dirtiest fossil fuel.
Coal prices have plunged almost 70% since peaking in September 2022, Exxaro Resources Ltd. said last month.
Seriti started a Section 189A process on Monday that holds consultations with workers on the outlined job cuts across the operations and corporate services team. It said the company remains committed to meeting coal supply obligations to state-owned utility Eskom Holdings SOC Ltd, inland customers and the export markets.
The National Union of Mineworkers said in an earlier statement that it would plan a “massive mobilization” to try and stop the process and accused to company of replacing employees with contractors.
“We recognize that this exercise will negatively impact our workforce and local communities,” Seriti’s Chief Executive Officer Mike Teke said in the statement.
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