Indian firm Jindal Steel and Power is set to close Australia’s oldest coal mine Russell Vale colliery due to weak market conditions.
The shutdown of the mine, 100km south of Sydney, comes amid widening losses that were reported by its operator Wollongong Coal (WLC).
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The company’s latest announcement comes after it could not obtain approval for expanded underground mining operations in 2015 and is expected to result in 80 job losses.
Wollongong Coal chief executive Milind Oza told Reuters that the colliery started operating in 1887 and its idling follows unsuccessful efforts by the Indian company to turn Wollongong Coal around.
Oza said: "This decision is not taken lightly and we have continually attempted to avoid this unfortunate situation by undertaking a series of workforce restructurings."
In April, the New South Wales’ Planning Assessment Commission rejected Wollongong Coal’s application to expand the mine.
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By GlobalDataThe company indicated that an expansion could allow the mine to resume operations.
In 2013, Jindal purchased a majority stake in addition to management control of Wollongong Coal.
In the financial year ending 31 March, Wollongong Coal reported a loss of A$199.2m ($142m).
During 2011, metallurgical coal prices declined from more than $300 a tonne globally to around $85 in line with weakening steel prices.
Image: The Russell Vale coal mine started operations in 1887. Photo: courtesy of nipitphand/ FreeDigitalPhotos.net.
