The announcement by Rio Tinto, which came as it reported a $2 billion profit for the first half of the year, will result in the loss of 140 jobs from the mine and follows an earlier announcement it would be cutting jobs at the nearby Clermont mine.
Revenue for Rio Tinto Coal for the six months to June was $2.53 billion, compared to the $2.52 billion for the previous corresponding period but net earnings were much lower at $196 million, compared to $433 million.
Blair Athol mine will finish mining operations this year after almost 30 years of production despite earlier plans to continue mining lower grade coal at the mine beyond 2012, Clermont region general manager operations Dawid Pretorius said.
“As coal prices rose in recent times we looked to extend the life of the mine by mining a poorer quality coal and harder to reach seam for a few more years,” he said.
“Unfortunately, the recent significant drop in thermal coal prices, and other factors such as rising costs and the foreign exchange rate mean this is no longer a feasible option and we will keep to the original plan to finish production in 2012.”
There are currently around 170 employees and contractors working at the operation.
There will be around 30 roles after production finishes at the site. These will include work in the coal handling and preparation plant and rail load-out facilities, which will continue to be used for coal from the nearby Clermont mine, as well as care and maintenance work in the lead up to a rehabilitation program.
Blair Athol has been progressively scaling back production in a transition towards closure since 2010, Pretorius said.
“After close to three decades, Blair Athol mine’s coal seams are largely mined out and the time has come to finish production,” he said.
“Coal mining has a long and proud history at Blair Athol, dating back to the late eighteen hundreds when coal was first discovered in this area. At its peak, Blair Athol mine was Australia’s largest exporter of thermal coal, blessed with uniquely thick coal seams.”
Since 2005, Rio Tinto had planned to close the mine at the end of this year and consulted with its community consultative committee and workforce, Pretorius said.
“The final day of production at Blair Athol mine will depend on the progress of mining operations over coming months, but we expect it will be before December,” he said.
“We have been planning for the eventual closure of Blair Athol mine for many years, as we know it will be a significant adjustment for our workers, their families and the local community.”
Elsewhere in the Bowen Basin, drilling programs to support Order of Magnitude studies near Hail Creek are nearing completion, the company said.
A review of the Mount Pleasant project to identify ways to reduce costs is expected to run into 2013, after which an investment decision would be made, it said.
In 2012, Rio Tinto’s share of Australian hard coking, semi soft coking and thermal coal production is expected to be 8.5 million tonnes, 3.5Mt and 19.5Mt, respectively.
