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South Africa Lifts Suspension of Glencore Optimum’s Mine License

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

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Optimum said Tuesday it’s seeking bankruptcy protection while attempting to renegotiate an unprofitable power-plant supply contract with state-owned power company Eskom Holdings SOC Ltd. The utility said it expects the terms of the standing agreement to be honored.

Earlier in the week, Mineral Resources Minister Ngoako Ramatlhodi said he also plans to meet with Eskom in a bid to find a reasonable way to deal with Optimum Coal which will avoid closure.

Mining companies plan to cut thousands of jobs after being hurt by rising costs and slower economic growth in China, which has led to less demand and declining commodity prices.

The company announced in July it would cut 380 jobs at Optimum and shut part of the mine due to lower coal prices.

“The company engaged on the issues of concern which resulted in the Minister suspending their operating licence”, Advocate Mahlodi Muofhe said.

Ramatlhodi later told Reuters the government was suspending operations at the mine until the issue was resolved. However, it claimed that it did comply with the legal requirement for the job cuts. “There is consensus to remedy the issues of concern”.

“The retrenchments… were inhumanely conducted and disregarded all the legal prescripts which govern the process of retrenchments”, he said a statement from his ministry, without being more specific.

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Trade union Solidarity’s deputy general secretary, Johan Kruger, said on Friday that this step would bring huge relief for the workers at the mine.

Ngoako Ramatlhodi