The move follows the announcement late last year that it would be retrenching 600 contractor and employees as part of a restructure of its Australian coal business because of the high dollar and low coal prices.

The new Australia-wide operations will leverage off the existing structure and systems in place in NSW and will be headed up its current chief operating officer Ian Cribb, effective from yesterday.

“As a result of this decision, Xstrata Coal’s divisional head office in Brisbane will close,” Xstrata said in a statement.

“In parallel to this, Xstrata Coal is taking the opportunity to review corporate services delivered to the divisions out of its Sydney office.

“These initiatives will lead to a reduction of Xstrata Coal’s office-based roles in Australia.”

Xstrata’s involvement in Australian coal has been under scrutiny as its parent company prepares to merge with commodities giant Glencore next month.

Glencore is believed to be concerned about the profitability of the Australian coal business and the need for developing greenfield minesites, favouring instead extensions of existing operations.

Xstrata’s proposed Wandoan coal project slated for Queensland’s Surat Basin now looks set to be canned.

In February Xstrata indicated it would follow the lead of Peabody Energy by announcing it would be converting its Collinsville coal mine in Queensland from a contractor to owner-operator model.

Xstrata Coal’s former star performer Oaky No 1 in Queensland experienced commissioning problems with its latest longwall last year which put pressure on the Queensland management of the company.

Meanwhile, in NSW the company has high hopes for its Blakefield North development in the Hunter Valley which will see longwall mining starting in 2017 with completion around 2022, ensuring the continuity of the company’s Bulga underground operations.