Glencore's S.Africa unit may shut coal mines, lay off workers

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JOHANNESBURG, Jan 28 (Reuters) - Glencore (Xetra: A1JAGV - news) 's South African coal unit, Optimum Coal Mines said on Wednesday it may close some of its mines and lay off some workers after export prices fell.

Optimum said in a statement the closures would reduce its overall production of thermal coal by at least 5 million tonnes per annum and that 1,070 employees may lose their jobs.

Thermal coal spot prices declined steadily in 2014 in response to surplus coal supply and measures implemented by China to support its domestic coal industry.

Optimum coal produces about 10 million tonnes of coal annually, half of which is sold to power utility Eskom while the rest is exported.

The company said it would not close its underground mines and will continue to supply coal to Eskom's Hendrina Power Station. It said it could re-open the opencast mines if economic conditions improve.

Optimum said it had begun discussions with labour unions representing its workers over the planned retrenchments.

Glencore re-opened its coal mining operations in Australia earlier this month after a three-week suspension aimed at combating the commodity's global supply glut.

(Reporting by Zandi Shabalala; Editing by James Macharia)