Yahoo News Glencore Axes 1,540 Jobs In Mining Cutback
The troubled miner and commodities trader Glencore is to cut at least 1,540 jobs as it slashes production of zinc and lead by one third.
In a statement on Friday, the FTSE 100 firm said mining operations in Australia, South America and Kazakhstan would be affected.
The company said the move was to "preserve the value of Glencore's reserves in the ground at a time of low zinc and lead prices, which do not correctly value the scarce nature of our resources".
Production was to be halted at its Lady Loretta mine in Australia and Iscaycruz in Peru.
Mining operations at George Fisher and McArthur River in Australia and at various locations in Kazakhstan were to be scaled back, Glencore said.
It said that "these changes, although temporary, will unfortunately affect employees at our operations" with 1,000 staff in Peru losing their jobs.
The others are based in Australia.
Glencore's share price rose 6% in early Friday trading on the FTSE 100 following the announcement - which also prompted a rise in zinc prices given that Glencore has an estimated 12% of the current market.
The share price gain extended to 13% by mid-afternoon trade - a welcome development for Glencore as the company's value has suffered ferociously in recent times from worries about its huge debt pile and falling commodity prices.
It lost almost a third of its value on Monday last week alone after investment bank Investec Securities warned in a report that Glencore's $30bn net debt to equity burden would render it virtually worthless unless commodity prices recovered.
Like rivals, Glencore's value has been hurt by the collapse in commodity costs - linked to the slowdown in emerging market economies.
It has announced a plan to cut its debt pile by almost a third through a £2.5bn cash call, which formed part of that strategy, proved controversial for investors .
Glencore shares - owned indirectly by millions in the UK through pension funds and ISAs - remain 60% down on their price since its takeover of Xstrata in 2013.
