Centennial Coal will stop production at Newstan underground colliery in the Western Lake Macquarie in August, resulting in the loss of 100 jobs.
The company said it is trying to reduce costs and increase productivity across the group, amidst falling coal export prices and high exchange rate.
Centennial Coal CEO and managing director David Moult said the decision is essential if the company is to sustain its competitiveness and market position.
"In the current market Newstan's losses can no longer be absorbed," Moult said.
The Newstan mine was under care and maintenance for three years from 2009 to 2011.
The company is planning to redeploy 45 of Newstan's 148 employees at its Myuna Mine in Wangi Wangi, in the Newcastle Coalfields. Seven employees will be retained for care and maintenance and the remaining would be made redundant.
The company said in a statement that Centennial will continue to progress both the Northern Coal Services and Newstan Extension Projects in anticipation of improved market conditions in the future.
"Securing new approvals for both projects will secure the significant coal resources at Newstan which are in close geographic proximity to local power stations and the Port of Newcastle, and will place Centennial in a position to recommence mining at Newstan when markets conditions improve," the company said.
Image: Centennial will continue to progress the Northern Coal Services and Newstan Extension Projects. Photo: courtesy of Centennial Coal.