Australia's Yancoal to put Donaldson mine on "care and maintenance mode"

The bad news continues for Australia's coal industry after Yancoal announced it would put its Donaldson mine on "care and maintenance mode."

Major coal miners have been mothballing or selling operations in Australia from slumping prices in coal prices, despite other major coal projects - Shenhua Watermark and Adani's Carmichael project - nearing completion of the approval phase.

Australian producer Yancoal on Wednesday blamed the ceasing of operations at its New South Wales state Hunter Valley operation on "ongoing market challenges" which have seen thousands of jobs lost in the coal space following the shuttering of Anglo American and Swiss-giant Glencore's respective collieries over the past year.

That's despite the miner securing 950 million U.S. dollars through a debt financing deal under which it handed over control of three of its Hunter Valley mines - Ashton, Austar and Donaldson - to a consortium of China-based lenders two weeks ago, local media reported.

The "care and maintenance" decision would result in only 11 full-time jobs for its 103-person workforce where it ships thermal and soft-coking coal for blending via the port of Newcastle, the world's largest coal terminal.

"Yancoal is committed to redeploying affected Donaldson employees across its Hunter Valley underground operations where possible," the company said in a statement, although voluntary redundancies will also be offered at its Aston and Austar mines.

Yancoal operates seven coking coal and thermal coal mines in NSW and Queensland state.

Australian producers have been under significant financial pressure as prices of coking coal, used in steel making, have slumped from 300 U.S. dollars per tonne in 2011 to around 80 U.S. dollars per tonne. Meanwhile prices for thermal coal have taken a similar slide to sit at decade lows.

Swiss-based giant Glencore has suspended their Australian operations while coal giant Anglo-American has announced a global restructure, placing many of its Australian mines up for sale. Rio Tinto recently sold one of its last remaining Australian coal assets to Indonesian conglomerate Salim Group.

However, Glencore chief executive Ivan Glasenberg, when delivering a 32 percent profit fall overnight, said he expects prices for thermal coal to improve in 2016.

"What is good about coal going forward and looks interesting is there is no new production in the world, if anything we have seen this massive cutback off Indonesian coal supply," Glasenberg said. Endit