Peabody Energy announced that they are stopping the operation of Wilkie Creek Mine in Queensland's Surat Basin. The company will be permanently closing by the end of 2013.
200 miners and contractors were already notified about the closure.
"We have completed our strategic review of the Wilkie Creek Mine, and we have begun the process of winding down operations. We thank the employees at Wilkie Creek for their hard work and dedication. We are committed to minimizing the impact of the closure on our employees, their families and the local community, and we intend to work with employees regarding redeployment to other operations where possible," said Peabody Energy Australia President Charles Meintjes.
Peabody is a leading coal producer and reserve holder in Australia with 11 operations in Queensland and New South Wales. Peabody Energy is the world's largest private-sector coal company and a global leader in sustainable mining and clean coal solutions. The company serves metallurgical and thermal coal customers in more than 25 countries on six continents.
The coalition might find the closure of the Wilkie Creek Mine advantageous in its appeal for carbon tax repeal; most importantly that Peabody Energy admitted that the carbon tax policy set by Labor played an important role in its decision to cease its operation.
"The decision to close Wilkie Creek has been made in response to a broad combination of lower market prices and higher costs. Whilst the carbon tax was not a primary cause of the closure, it represents a substantial burden on an export-driven mine." a company spokeswoman told The Australian.
"Peabody's Queensland strategy is to focus on the development and expansion of its metallurgical coalmines and projects in the Bowen Basin. The Bowen Basin strategy will allow the synergies and efficiencies of the assets that are located in close proximity to one another to be maximised," the spokesman added.
The Wilkie Creek Mine had already cut 70 jobs back in September and 600 jobs early in 2013 in its aim to continue its operation despite rising costs and sliding coal prices, but, to no avail.
The Australian reported that Peabody Energy had been selling the mine for a price of about $50m and had placed its value of Wilkie Creek at $US45m because of changed market conditions.