SYDNEY, Sept 1 (Reuters) - One of Australia’s oldest coal mines on Tuesday said it was being shut by its Indian owner Jindal Steel and Power as market conditions in the sector continue to deteriorate and financial pressures on producers mount.
The closing of the Russell Vale colliery 100 kms (62 miles) south of Sydney comes amid widening losses reported by operator Wollongong Coal Ltd, majority-owned by Jindal.
Idling of the colliery, which started operating in 1887, will result in 80 job losses and follows unsuccessful efforts by Jindal to turn Wollongong Coal around, said Milind Oza, the chief executive of the operating firm.
“This decision is not taken lightly and we have continually attempted to avoid this unfortunate situation by undertaking a series of workforce restructurings,” Wollongong Coal’s Oza said.
Wollongong Coal reported a A$199.2 million ($142 million)loss in the financial year to March 31, following a A$169.4 million loss the previous year.
Jindal Steel acquired a majority stake and management control of Wollongong Coal in 2013. Most of the coal was being exported to make steel for Jindal in India.
Global metallurgical coal prices have dropped from more than $300 a tonne in 2011 to around $85 in step with weakening steel prices. Jindal Steel shares have dropped 55 percent this year.
Chinese-controlled coal miner Yancoal Australia in July announced it was cutting close to half the jobs at two of its collieries after losses climbed to more than A$1 billion ($730 million) over two years.
Brazil’s Vale, also in July, sold a mothballed coal mine in Australia to a local operator for A$1. At peak coal prices, the mine was worth around A$500 million.
A small number of employees at the Russell Vale Colliery will be retained for care and maintenance activities, according to Wollongong Coal. ($1 = 1.4015 Australian dollars) (Reporting by James Regan; Editing by Himani Sarkar)