Brazilian mining giant Vale is planning to divest its Degulla coal mine in the Galilee Basin in Queensland amidst falling commodity prices and challenging market conditions.
It is the group’s third Australian coal asset put up for sale.
In February 2013, Vale had written down $5.6bn in impairment charges for the 2012 financial year, including a $2.85bn write-down on its Onça Puma project.
The write-downs on assets totalled $4.02bn, including $1.03bn from Australian coal assets, while write-downs on investments for the year stood at $1.64bn.
"2012 was challenging for the global economy, which amid heightened uncertainty expanded for the second consecutive year at below trend pace.
"Against this backdrop, our financial performance was negatively impacted. Its main indicators dropped significantly in relation to 2011, a year when Vale achieved its best financial results since its incorporation in 1942," the company stated.
With a steep drop in coal, iron ore and gold prices, several Australian mining companies, which are battling to restore profitability, have shut down unprofitable mines and cut jobs.
Last week, global mining giant Glencore Xstrata axed around 450 jobs at two central Queensland coal mines while the world’s largest gold mining company, Barrick, cut 65 jobs in Western Australia.
US mining giant Peabody Energy also announced 450 job cuts at its New South Wales and Queensland coal mines in an effort to reduce surging operational costs.
Mining services company Downer EDI plans to axe 185 jobs at its Goonyella Riverside coal mine in central Queensland.
Tough market conditions have driven the companies to scale down operations, resulting in approximately 1,000 job losses in just one week.
Image : With a steep drop in coal prices, several mining companies in Australia are closing unprofitable mines. Photo: Dan/Freedigital.net.