South African mining ministry has lifted its suspension on operations of Glencore's subsidiary Optimum Coal after discussion with the company management.

The company was accused of handling the 380 job cuts in an "inhuman" manner which prompted the mines ministry to order for the suspension of operations at the South African mine.

The coal producer said that it had to suspend operations due to the fall in price of coal. However, it claimed that it did comply with the legal requirement for the job cuts.

Reuters cited Mahlodi Muofhe as saying: "The company engaged on the issues of concern which resulted in the minister suspending their operating licence. There is consensus to remedy the issues of concern."

Previously, Glencore said that it was planning business rescue proceedings and place Optimum Coal Holdings and Optimum Coal Mine (Optimum) under supervision.

The company said that the problem was arising due to financial hardship it has been facing as a result of the supply agreement it signed with state-owned power company Eskom.

It claimed that under the agreement the company signed with Eskom in 1993 it had to supply coal at a cost which was less than the cost of production for a number of years.