The hard reality of a world impacted by a pandemic means even local mining companies are now hurting financially

The hard reality of a world impacted by a pandemic means even local mining companies are now hurting financially.

With thermal coal prices dropping to $US50/tonne and below at the end of July, from their most recent high of $US120/tonne in July 2018, some tough decisions are expected to be made to sustain operations.

First Peabody's Wambo underground went into a partial shutdown for six weeks during June and July and now the Australian owned Bloomfield Group (operators of the Rix's Creek Mine just north of Singleton and Kings Engineering, Maitland) last week applied for the Federal Government's Jobkeeper wage subsidy.

A spokesperson of the company said "The Bloomfield Group operates in both international and domestic markets within the mining and engineering sectors. Like many businesses, we have recently experienced a decline in turnover."

"Where we satisfy the eligibility criteria, The Bloomfield Group has made applications for JobKeeper support.

"In addition to focussing on how we best protect more than 500 local jobs, we are maintaining our strict COVID-19 protocols to reduce the risk to our employees, their families, our contractors and the broader community."

Last year Bloomfield was investigating changes to its existing work rosters at Rix's Creek to improve productivity and retain employees those discussions remain ongoing.

It has been reported in the Australian Financial Review this week that Glencore is working on plans to slash output from Australian coal mines in response to weak prices, in a move that will reinforce the Swiss miner's reputation as the most active manager of supply and demand in global commodity markets.

"Glencore is yet to finalise which of its NSW and Queensland mines will bear the brunt of the cuts but confirmed it would soon make ''targeted volume reductions'' in Australian coal," they wrote.

So far this year coal production across Glencore's sites including those in Columbia and South Africa is down 14 per cent.

During the height of the last major downturn in 2015 the company cuts its Australian production by 15 per cent.

Pundits are thinking a similar response could be taken in 2020 given the forecasts for continuing lacklustre demand and low prices.