Swiss-based giant Glencore will shutter it's Tahmoor metallurgical coal mine in New South Wales state by 2019 as producers continue to battle a depressed market.
Major coal miners have been mothballing or selling operations in Australia from slumping coal prices despite major coal projects - Shenhua Watermark and Adani's Carmichael project - nearing completion of the approval phase.
Swiss-based Glencore on Thursday said it had begun consultation with its 350 employees at its New South Wales (NSW) state Tahmoor colliery to begin the mine's closure, expected in 2019.
"The decision has been made as a result of continued low prices in global coal markets, which has meant the economic return from reserves still available at Tahmoor are not sufficient to warrant the investment required to mine them," Glencore's Australian arm said in a statement.
Glencore is one of the largest coal miners in Australia, running 18 mines which employ over 7,500 people. Its Tahmoor mine, which began operation in 1979, produced 2.1 million tons of metallurgical coal in 2015.
Australia's coal sector has been in constant contraction over the past two years as producers succumb to financial stress from falling key industrial commodities as heavy supply, despite lower demand, continues.
Prices of metallurgical - or coking coal - which is used in steel making have slumped from around 300 U.S. dollars per ton in 2011 to around 80 U.S. dollars per ton, in line with weakening steel prices.
Prices for thermal coal have taken a similar slide. Late last year Glencore effectively closed its prized Collinsville colliery after restricting thermal coal production at the site to in-pit inventory and current stockpiles with little cost and effort until prices improve.
Glencore's move preceded global giant Anglo American's divestment out of Australia's coal industry amid its global restructure, merging six businesses into three with plans to cut its workforce by two-thirds.
Anglo's three Queensland mines and its mothballed New South Wales mine, which are currently in care and maintenance mode are for sale.
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