Glencore said that the operation is not viable in current market condition due to slump coal prices.
The company previously announced its plans to put the mine under care and maintenance, and reduce production to five million tons of coal per annum from the 10 million tons.
Glencore said: "Optimum currently intends to retain sufficient mining operations and processing capacity to ensure the continued supply of coal to the Hendrina Power Station.
"Glencore has agreed to provide funding to Optimum to enable Optimum to pay the full retrenchment costs as tabled at the CCMA and will offer assistance to affected employees through re-training programmes to enable them to plan for the future."
The company is also planning to provide portable skills and financial management training to the affected employees and it will provide retrenchment packages above the industry standard.
Glencore highlighted that it is also considering re-employing some of the employees to other parts of the business if vacancies become available.
Optimum could consider re-opening these operations if the market situation improves.
