In another sign that the Australian mining industry is experiencing a major downturn, global mining powerhouse, Peabody Energy has announced that they will be cutting their workforce in Queensland by 400 employees. This massive reduction in staff comes only weeks after it announced that 450 contractors would be let go.
Peabody said in a statement that the reason for the staff reduction was due to global demand for resources declining and a generally challenging economic conditions. Unions, however, are in disagreement with the company however as they have highlighted the fact that Peabody has been increasing production which contradicts their claims of a slowdown.
The coal industry is likely to experience more hard times as new mines start to come online in Queensland. The major one that will be online shortly is the Daunia project which is a major project of BHP.
When coal prices were at record highs, companies failed to ensure costs were kept under control and this has come back to bite them. Coal companies are now attempting to wind back their costs and increasing profitability by slashing jobs and increasing the amount of production.
Queensland has lost over 7000 jobs since the mining downturn has started and it looks like going further unless the global economy improves dramatically.