New Zealand's Solid Energy has announced it will suspend operations its Spring Creek coal mine and cut jobs at Huntly East.
The announcement comes just a day after it was revealed that hundreds of jobs were at risk as Solid prepared its cost cutting review.
The review itself came a few weeks after Solid faced difficulties with renewing its Huntly East coal supply contracts with nearby smelters.
According to Solid it is making major changes to limit "the impact of the challenging global coal market on its business.
"The changes are designed to absorb the impact of the global coal market downturn by introducing operating efficiencies to preserve and generate cash, while retaining core capability and future options for growth," Solid Energy said in a statement.
Solid Energy CEO Don Elder stated that "these decisions are the result of a comprehensive review of the business.
"I am very aware of the impact these decisions will have on affected staff members and our communities, but we've had to make these difficult decisions to cushion the impact of the market and protect as much as we can of the long-term value of the business."
Its main proposal including cutting staff and upgrades at Huntly East; suspending work at Spring Creek; selling or closing its biodiesel business; looking at coal gasification; slashing expenditure by NZD$100 million; and 'restructuring the organisation", which will further reduce the workforce.
At its Huntly East mine Solid will cut investment into upgrading ventilation, and reducing staff levels from 234 positions down to 171.
It will also slash around 60 contractor positions from its mine ventilation upgrade project.
Solid will stop work at Spring Creek almost immediately.
The miner explained that the "Spring Creek Mine has struggled to be profitable for some time. It has been in a development phase since the end of 2011, with minimal coal production as tunnels were being formed into a new resource area and underground infrastructure installed to allow this new coal block to be mined.
"It is not expected to return to full production until early in 2013 and will need a further $70 million of operational cash and capital investment to reach that point and at current market prices will not generate a positive margin."
Earlier this year Solid was forced to shut Spring Creek after failing to report a number of safety incident.
However it is not all grim, with Elder adding that "we believe Spring Creek still has potential if the international market turns around, as does Huntly East if we can secure satisfactory long-term contracts with our major North Island customers to support future investment".