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Johannesburg – The National Union of Mineworkers (NUM) is considering taking legal action against the government if Glencore [JSE:GLN] cuts over 600 jobs at its Optimum Coal unit, it said on Monday.
Glencore said last week it would proceed with a plan to close some of its Optimum Coal operations because of weak prices.
The Swiss-based company said it would place on "care and maintenance" some opencast operations, large parts of the coal processing plants and associated support services at the mine and would consider reopening them if market conditions improve.
The NUM said in a statement Glencore had, in its view, failed to comply with its social and labour plans regarding severance packages and it was therefore up to the department of mineral resources (DMR) to "enforce compliance".
"We are consulting with our lawyers as to what recourse we will take against DMR if they fail and Glencore succeeds with retrenchment," NUM Deputy General Secretary William Mabapa was quoted as saying.
Glencore rejected the NUM's allegations.
"We have continually engaged with all parties ... in order to determine whether measures were available to avoid the closure," it said in a statement. "It was demonstrated during these sessions that these operations are financially not viable in the current market conditions and that there are no measures available to avoid the retrenchments."
The London-listed group said the redundancy packages it offered were above industry standards and added that Optimum will also consider redeploying some of the employees to other parts of the business should jobs become available.
Optimum produces about 10 million tonnes of coal annually, half of which is sold to Eskom, while the rest is exported. Officials from the DMR were not immediately available for comment.
