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Global mining major Rio Tinto is in discussions to lay off part of its workforce at its coal mines across Australia.

Rio’s Coal & Allied Industries unit will also be hit by redudancies due to a decline in coal prices.

Australia, the world’s second largest exporter of thermal coal used for power generation, has seen its coal prices fall over 20% to under $90 per metric ton (1.1023 tons) as demand for the material slows in China.

A high Australian dollar and a bleak outlook for the growth of the mining industry have forced Rio to cut jobs to push costs down, while other global miners such as Xstrata have also resorted to similar measures recently.

Rio Tinto told Reuters, "We are working to improve our competitiveness by actively seeking ways to reduce costs across our business, which unfortunately means some roles will no longer be required."

The company owns a majority stake of 80% in Coal & Allied, which produces thermal coal in Australia’s Hunter Valley, while Japan-based Mitsubishi owns the remaining stake.

According to a Rio Tinto spokesman, the number of jobs to be cut is still unspecified.

Rio Tinto has already begun relieving contractors and employees of their duties at its Clermont thermal coal mine in Queensland, which has yet to achieve full capacity since production started in 2010.

Image: Rio Tinto will cut costs by laying off workers at Australian coal mines. Photo: Rio Tinto