Peabody Energy’s decision to close its Wilkie Creek coal mine after Christmas is a disappointing sign of the times, Queensland Resources Council Chief Executive Michael Roche said today.
The thermal coal mine near Dalby is another poor turn of events of the export coal sector, Roche said.
“The announcement is a sad blow for the region but also indicative of the challenging outlook for the thermal coal industry in particular,” he said.
Suffering high operating costs and lower commodity prices Australia’s coal sector is struggling.
“It’s no secret that a number of mines in Queensland and New South Wales are walking a financial tightrope as a result of subdued global demand, inherently high production costs and a stubbornly high exchange rate,” Roche said.
He claimed that some operations are only continuing because it would be more expensive to walk away from take or pay contracts for rail and port services.
“Cost cutting is the only the mechanism available to coal companies to ride out the downturn that we estimate has cost more than 8000 positions in Queensland since mid-2012,’”he said.
Peabody said approximately 200 employees and contractors have been told the operation, located in Queensland’s Surat Basin, will close at the end of December.
"We have completed our strategic review of the Wilkie Creek Mine, and we have begun the process of winding down operations," said Peabody Energy Australia President Charles Meintjes.
The miner said it is calling for voluntary redundancies and will try to relocate a number of workers.