Falling global demand for thermal coal is now being felt in the heart of the Hunter Valley coalfields with Peabody to partially shutdown their Wambo underground thermal coal mine for 59 days from June 19.
With COVID-19 restrictions across the world impacting economic activity, in particular energy demand from manufacturers, there has been reduced sales for thermal coal.
Since hitting a high price of $US120/tonne in mid 2018 thermal coal prices for the higher quality 6000kcal/kg have slumped to $US51/t this month.
It was back in the last coal price slump of 2014/15 that workers in the underground mine were faced with job losses.
Commenting on their decision a Peabody spokesperson said:
This week Peabody has taken proactive steps to protect the long-term sustainability of our Wambo underground mine.
Like many other Australian mining operators, our company has been affected by incredibly challenging global economic conditions caused by the COVID-19 pandemic and, as a result, we are taking steps to align our production with current coal demand.
We have made the very difficult decision to temporarily suspend production in a part of the mine while maintaining essential development work to support future production.
We have fully and openly communicated our decision and the reasons for it to our team and thank them for their understanding and ongoing commitment to our operations.
We very much regret the impact this process will have on affected employees, their families and the community and we are offering our Employee Assistance Program service to anyone who feels they need support.
The company's Wambo open cut mine is not affected by this shutdown.
In other coal supply news the Australian Financial Review reports some power plants in China have been told to stop importing Australian coal, according to traders and analysts in what appears to be the latest threat to Australia's export trade with China.
Unconfirmed reports suggested China was reviving last year's unofficial ban on some Australian coal imports as it seeks to prop up domestic prices.
Reuters reported this week that China would tighten coal import rules in the second half of 2020 to shore up its struggling domestic industry. Coal imports were at record highs in the first four months.