South Africa-based state-run Coal of Africa (CoAL) has placed Mooiplaats Colliery on care and maintenance citing global drop in thermal coal prices over the last year.
The move will affect nearly 290 employees and 258 contractors involved with the operations at the mine, which is located in the Ermelo Coalfield, Mpumalanga Province.
The poor operational performance and dry geological conditions has further worsened the company’s efforts to improve the productivity to establish profitable operations. Instead, the operations incurred operational losses of about SAR167m ($16.7m) for the financial year ended 30 June 2012.
CoAL has commenced regulatory Section 189A (S189A) process seeking alternatives to placing the Colliery on care and maintenance. The process will involve a two month consultation period during which the company will engage in talks with all related stakeholders.
Commenting on the mine closure, CoAL chairman David Brown remarked: "This decision has not been taken lightly as CoAL recognises the importance of conserving jobs, but at the same time the need to preserve the Company’s financial structure and ensure its future sustainability is paramount."