Yancoal Australia has announced plans to suspend its Donaldson coal operation located near the Port of Newcastle due to ongoing market challenges across the globe.

The company will put the operation under care and maintenance in June 2016 and plans to carry out some feasibility studies on its future development including new areas of underground mining.

Beginning 14 March, Donaldson is set to cut its existing mining activities from the three mining units to two at its Abel underground mine, which will result in the loss of ten jobs.

Yancoal will redeploy those employees who are immediately affected, to its neighbouring Ashton underground mine.

"The affected Donaldson employees would be moved to the company’s Hunter Valley underground operations where possible."

In addition, redundancies will occur at the company’s Abel, Ashton and Austar underground operations prior to placing them on care and maintenance.

At present, Donaldson operates with 103 employees, including staff and 11 fulltime roles would be needed to support the operation.

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The affected Donaldson employees would be moved to the company’s Hunter Valley underground operations where possible.

Under the care and maintenance programme, Yancoal will carry out the ongoing rehabilitation of the Donaldson site in accordance with existing approvals in addition to managing the site above as well as below ground.

Donaldson’s underground Abel mine produces thermal and semi-soft coking coal for blending, exporting through the Port of Newcastle.

In 2015, the mine produced 1.81 million tonnes of ROM coal and 1.34 million tonnes of saleable coal.

The Donaldson operation includes Abel and Tasman underground mines, as well as Donaldson open cut mine.