The company said 122 employees at the Ulan underground and surface mines (94 contractors and 28 permanent employees) and 158 employees at the Tahmoor underground mine (57 contractors and 101 permanent employees) would be affected.

The cuts will occur simultaneously and will begin immediately.

The miner will begin by calling for voluntary redundancies from the permanent workforce at Tahmoor’s underground mine and coal handling and processing plant, and from Ulan’s permanent underground workforce.

Xstrata said the restructure was necessary to align employee numbers with anticipated operating requirements in response to current market conditions.

“The restructure is necessary to protect the long-term financial viability of the business and is aimed at improving efficiencies and realigning employee numbers with the current operating environment,” Xstrata Coal chief executive Peter Freyberg said.

“Tahmoor costs remain too high and production and prices are not strong enough to support our current number of employees. As we realign the Ulan complex, we will resource core mining activities and outsource specialist requirements and irregular peaks to improve efficiencies.”

Freyberg said Xstrata would assist affected workers with counselling, employment and financial advisory services, and where vacancies occurred in other Xstrata Coal operations, employees would be encouraged to apply.

Operations at Tahmoor will be reduced from seven days to five days per week while no changes will be made to the shift roster at Ulan.

Tahmoor, in the southern coalfields, currently employs 493 people and produces about 2 million tonnes per annum of coking coal.

The Ulan complex near Mudgee currently employs 550 people and produces 6Mtpa of thermal coal.

Late last week Xstrata announced it would reopen the Oaky No. 1 mine after securing some spot coking coal contracts. The company had shut down the mine almost eight months ago, letting go of 230 workers.