Kangra halting production

Citing the impact of COVID-19 global lockdowns, paired with low prices and depressed demand for thermal coal, Kangra is placing its mine in Mpumalanga, South Africa, on care and maintenance.
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The Kangra underground coal operation in Mpumalanga

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Kangra and operator Menar did not indicate when the closure would occur, but confirmed 359 workers would be affected. A recall is in place for priority re-employment of current staff should the mine resume work under improved market conditions.

"We faced unprecedented difficult choices immediately when customers shut business," Menar MD Vuslat Bayoglu said.

Rather than carry on as normal and expend its cash reserves, the company decided to  meet the obligations to its workers, paying them for services rendered, and stop incurring further costs. This allows it to preserve the complex using a few employees, then restart when the market improves.

After conversations with the mine's unions, an agreement was made to maintain the viability of the operation.

"Cutting jobs and stopping operations is painful to us and the employees. However, it is better under the circumstances than to allow permanent destruction of potential employment in future," Bayoglu said.

While Kangra has about 12 months of remaining life, developments at the project could prolong its lifespan to more than 30 additional years. Regulatory approvals are still pending for that growth.

The mine produces about 2 million tonnes annually.