Whitehaven Coal has announced that it will close its Sunnyside mine indefinitely due to weak coal prices.
The mine, near Gunnedah in north-eastern NSW, currently employs 14 Whitehaven workers and 23 external contractors.
All Whitehaven employees would be offered positions in other Whitehaven operations and Whitehaven management will continue to consult with them in relation to this, the company said.
The site would be placed on care and maintenance, with the decision taken as a result of the continued decline in global coal prices.
Whitehaven operates six coal producing mines, with Sunnyside producing about 400,000 tonnes of high-ash thermal coal last year – with the capacity to produce one million tonnes – out of an approximate five million tonnes a year currently produced.
Its coal was more costly to blend with other products, according to Whitehaven.
The lost 400,000 tonnes would be offset by increasing production at its Werris Creek mine, from the current planned rate of 2.0 mtpa up to the approved rate of 2.5 mtpa, the company said in a statement.
Werris Creek was Whitehaven’s lowest-cost mine and produces coal of a superior quality and value to Sunnyside, the company said.
“While the majority of our operations are performing acceptably in the current climate, in the case of Sunnyside, it has become apparent that at current coal prices production it is not viable,” Whitehaven managing director Tony Haggarty said.
Production would restart if and when the coal market improved to appropriate levels, Mr Haggarty said.
The announcement comes on a busy day for the miner, secured planning permission to develop the highly-regarded Maules Creek coal project in NSW.
Production is due to commence halfway through next year, with saleable production exceeding 10 mtpa from 2016.
There are also reports on Thursday that Mr Haggarty wants to quit if a takeover bid by entrepreneur Nathan Tinkler succeeds, which the company is refusing to comment on.
Whitehaven shares are in a trading halt, until the release of its quarterly report on Friday.
