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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (30429)	12/16/2008 9:31:00 PM
From: LoneClone	Read Replies (1) \| Respond to of 193999

Xstrata shuts down major coal mining section in Australia Xstrata has announce the closure of half its production at the very large Oaky Creek Number One coal mine in Queensland, Australia Posted: Tuesday , 16 Dec 2008 SYDNEY (Reuters) - mineweb.com Xstrata Plc (XTA.L) has shut down half its coking coal production at a mine in Australia, the latest cutback by miners in the country as a slowdown in global steelmaking slashes demand for coal and other raw materials. London-listed Xstrata suspended mining of the longwall at its Oaky Creek Number One project in the northeastern state of Queensland, it said in a statement. Oaky Creek Number One last year yielded 6.2 million tonnes of coal out of a total of 11 million tonnes at the overall complex, Xstrata said. "It is an unfortunate downturn but it is in direct response to the market. It is a tough market environment for the industry which isn't immune to the credit crisis," said James Rickards, communications manager at Xstrata Coal. The production cut comes as other Australian suppliers of coal react to customers deferring shipments by reducing operations. Macarthur Coal Ltd (MCC.AX) also announced on Tuesday job and production cuts at its Australian mines. Demand for metallurgical coal, dependent solely on purchases from steel mills, has been particularly hard hit by the global financial crisis as steel makers slash production. China's once-bustling steel mills have cut production by a fifth since the global financial crisis hit its economy a few months ago. "Until now it's mostly been the iron ore producers scaling back," said Patterson Securities analyst Andrew Harrington. "But with the steel industry in such bad shape at the moment, you'd have to expect coking coal companies to be hit hard too." Australia's government cut its forecast for the country's metallurgical coal production in 2008/09 by 5 percent on Monday to 146.6 million tonnes, and said the outlook for steel and steel-making raw materials had deteriorated in the past three months. Xstrata's decision would result in the loss of 190 contracting positions and 40 permanent jobs, the company said. Macarthur cut its first-half profit forecasts, its coal sales target, suspended its interim dividend and cut jobs as customers postponed shipments amid falling demand. "The downturn is unprecedented in its magnitude," Chief Executive Nicole Hollows told reporters, adding that the next six months would be tough. (Reporting by James Regan and Bruce Hextall)