Brazilian mining giant
Vale said on Friday it plans to close its Integra coal mine in Australia
because it is losing money, the latest in company efforts to row back from
non-core overseas assets.
The decision comes as Vale
and rivals BHP Billiton and Rio Tinto come under pressure from investors to cut
costs and streamline businesses to better weather a period of lower commodity
prices.
Vale CEO Murilo Ferreira
had previously said it was looking to sell a 15% to 25% stake in its coal
operations. He added, though, that he did not expect that any mines would be
closed.
Vale's plans will end
output from the Integra mine but keep the project under "care and
maintenance," a status that allows the mine to be reopened quickly if
economic conditions make operations viable again.
The closure underlines the
difficult environment for coal miners. The price of thermal coal fell 40% in
the last three years as coal supply remained robust and demand fell in Europe
and China.
Vale lost $480-million on
its coal business in 2013.
Local Australian media
reported 500 people had been laid off at Integra as a result of the closure.
The Integra complex,
located in the state of New South Wales in eastern Australia, produces about
4.5-million tonnes of coal per year from both its underground and open cut
mine. The mine produces both metallurgical coal used in steelmaking and
thermal, or "steam" coal, used to generate electricity.
