US-based Peabody Energy is set to cut metallurgical coal production by about 1.5 million tonnes a year at its North Goonyella mine in Queensland, Australia.

Aimed at reducing costs, the company’s latest move also enables it to improve cash flows and increase productivity in addition to preserving hard-coking coal reserves for sales at a time when markets improve.

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The production cut will also enable Peabody to improve the business across key areas that include operational, selling, general and administrative expenses (SG&A), financial, and portfolio.

"The company plans to transition the mine to one production shift per day and reduce associated employees and contractors by 35% to 40%."

In July, the company plans to transition the mine to one production shift per day and reduce associated employees and contractors by 35% to 40%.

At its underground longwall North Goonyella mine earlier the company anticipated production levels of three million tonnes but now it would be reduced to about 2.3 million tonnes in 2015.

By reducing production levels in line with contracted sales Peabody continues to meet customer commitments in the existing environment.

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North Goonyella mine, which was acquired by Peabody in April 2004, sold 1.7 million tonnes in 2013.

The medium-volatile coking coal produced at the mine is used to make a strong and low-reactivity coke in a wide variety of coke oven blends.

Peabody provides sustainable mining, energy access and clean coal solutions, serving metallurgical and thermal coal customers in more than 25 countries on six continents.