Minergy Ltd has indefinitely suspended operations at its Masama Mine in Medie, saying coal prices have fallen by 33% since mid-December affecting the company's cash flows.
CEO Morne du Plessis confirmed the latest developments in a statement released this evening. The move will affect more than 300 workers employed by mining contractor Jarcon Opencast Mining Botswana.
"As with many businesses, when structural changes occur in a market and external demand factors influence price, operational adjustments need to be made to bring operating costs in line," he said.
Mmegi earlier reported that Jarcon's workers had downed tools ahead of retrenchment scheduled for March 31.
The Botswana Mine Workers Union said the contractor told workers the company was owed significant arrears by Minergy and could no longer continue operating.
Du Plessis acknowledged overdue payments to Jarcon and added that operations will resume when demand for coal and pricing improve.
"There is no truth to the rumour that Minergy is closing the Masama Mine," he said.
While mining operations are suspended, sales of stockpiles will continue with Jarcon's help, the CEO said.