Wollongong Coal will axe 80 jobs and shutter its Russell Vale mining operations after widening its annual loss to $200 million.
The company said mining would be suspended at its Russell Vale Colliery in southern NSW because of difficult operating and financial conditions.
Weak coking coal and steel prices have weighed on the profitability of one of Australia’s longest running coal mining operations which began in 1887.
Recently appointed chief executive Milind Oza said the decision to suspend operations and cut jobs had not been taken lightly and the company had undertaken a series of workforce restructurings in an attempt to avoid the measures.
“Wollongong Coal has been facing a tough operating environment for some time including ongoing delays in the approval of the company’s underground expansion project and significant financial losses,” Mr Oza said in a statement on Tuesday.
The changes will affect operators, electricians, fitters, deputies and other staff.
Wollongong Coal said it will continue to seek approval for the underground expansion at Russell Vale.
The expansion would allow the company to recommence extraction of coking coal which is used in steel production.
Wollongong Coal made a $199.2 million loss in the year to March 31, following a $169.4 million loss the previous year.
The loss includes an impairment charge of $48.2 million and unrealised net foreign exchange losses of $80.1 million.
Revenue fell 87 per cent to $8.5 million.
Mr Oza was appointed chief executive on July 31 with a total cash salary of $468,142 per annum.
Wollongong Coal shares have been suspended from trading after last trading at two cents.