The mine chiefly supplies coal to power stations in nearby Biloela and also in Gladstone, roughly 120 kilometres away.

AAMC chief executive Seamus French said its strategy was focused on growing its metallurgical coal business.

“The Callide mine does not align with our growth strategy and the divestment process will lead to the sale of the operation as a going concern,” he said.

“Callide mine is a low cost coal producer with a significant resource base of more than one billion tonnes, a stable and well run operation in an established mining area and has a strong future underpinned by long-term coal supply contracts.”

He expects the sale to provide an “exciting opportunity for investors to expand the Callide business”

“The process will be undertaken with care and respect for our employees and all other stakeholders, with our priority during this period being the safety of our employees and stability of the operation.

“Anglo American will work closely with government, its customers, suppliers and the local community to ensure they are consulted throughout this process.”

The Callide open cut mine has 10 million tonnes per annum of saleable production capacity with seams up to 26m thick.

The coal meets nearby domestic demand through an overland conveyor while the rest is railed to Gladstone primarily for the domestic market.

Back in July, Cockatoo Coal, Posco and Korea Electric Power Corporation struck conditional agreements to acquire five coal projects from AAMC for a total of $A580 million.

But these complicated transactions are still awaiting Foreign Investment Review Board approval.

All of these projects are focused on thermal coal apart from the underground Sutton Forrest project in the Sydney Basin of New South Wales, which holds a deposit of 115 million tonnes of export grade metallurgical and thermal coal.

Under the proposed transaction structures announced by Cockatoo, Korean steel maker Posco will fully acquire the Sutton Forrest project from AAMC and will later transfer a 30% stake to Cockatoo.

Meanwhile, construction of the Callide Oxyfuel project was halfway complete last month.

The project aims to deliver an oxygen plant at the Callide A power station to help produce an exhaust gas stream rich in carbon dioxide which can be separated and liquefied for underground storage as part of a geosequestration strategy to lower carbon emissions.

This project is a joint venture between CS Energy, the Australian Coal Association, Xstrata Coal, Schlumberger, and Japanese participants JPower, Mitsui and IHI Corporation, but it also receives funding from the Australian, Queensland and Japanese governments.