Glencore Xstrata has announced plans to suspend operations at its Ravensworth underground coal mine in Australia to control surging costs after declining coal prices.

The underground mine in the Hunter Valley coal belt of NSW, which is said to have produced 2.1 million tonnes of semi-soft coking coal in the year 2013, is located 25km from Singleton and employs 133 people

Xstrata Coal NSW is managing the mine for the joint venture owners Resource Pacific and POSCO.

Glencore Xstrata said it is shutting the Ravensworth mine on a care and maintenance basis.

"Glencore Xstrata said it is shutting the Ravensworth mine on a care and maintenance basis."

Glencore spokesman told Reuters that due to a combination of lower prices, high production costs, a strong Australian dollar, as well as geological constraints in future mining areas, the company could no longer operate the mine.

Throughout the coal sector in Australia, mining companies have been undertaking cost-saving programmes in order to offset surging production costs and low coal prices.

Australian coking-coal prices have declined their steepest and are near their lowest level since 2007.

In recent months, AngloAmerican, BHP Billiton and Rio Tinto also closed mines and cut staff to in a bid to control surging costs.

NSW Minerals council chief executive Stephen Galilee said around 1,500 direct mining jobs have been axed in the mines of Hunter over the last 18 months.

Glencore Xstrata added that the Australian coal market prospects for 2014 will remain challenging.

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