Mining and natural resources company Anglo American is set to temporarily halt production at its Aquila coal mine in Central Queensland, Australia, due to tough market conditions.
The company will initially slow down production at the mine and then place it under care and maintenance from 30 July 2013 so that it conforms to safety requirements.
Aquila coal mine is a bord and pillar operation and has a capacity to annually produce around 500,000t of premium hard coking coal.
Anglo American metallurgical coal business chief executive Seamus French said the company’s decision comes in response to weakening demand and low coal prices.
"Based on the current outlook with low coal prices forecast for the remainder of the year, Anglo American has taken the decision to place the Aquila mine under care and maintenance.
"We continuously review our operational margins and since early last year we have taken out two million tonnes of high-cost production capacity as part of this review," French added.
The shut down of Aquila mine could be the next step in the review process, French noted.
Anglo American, which is the world’s largest producer of platinum, diamonds, copper, nickel, iron ore and metallurgical and thermal coal, has become the latest casualty of falling iron ore and coal prices.
French said that the company will work with the affected employees at the mine and will decide on redeployment opportunities as well as redundancy options.
Aquila mine has 80 employees of which 20 are Anglo American staff, with the rest hired by contractor Bounty Mining.
Last year, the company axed 35 jobs at its Grasstree coal mine, 50 at Moranbah North mine and 40 at Dawson coal mine due to a cut in production.
Low coal prices and surging production costs have prompted several Australian mining companies to undertake cost-saving programmes.
According to Australian Coal Association, around 9,000 jobs have been axed in the mines of Queensland and New South Wales over the last 18 months.
Anglo American has operations in Africa, Asia, Australasia, Europe, North America and South America.
Image: Low coal prices and surging production costs have prompted several Australian mining companies to undertake cost-saving programmes. Photo: dan/FreeDigitalPhotos.net..