The project was due to start longwall production in 2017 and would have extended the life of existing underground operations at our Bulga complex in the NSW Hunter Valley.

The decision has been made as a result of continued low prices in the global thermal and coking coal markets, the company said in a statement.

It is a blow for the Hunter Valley which last month learnt that the Planning Assessment Commission knocked back Anglo American’s proposed Drayton South project with the possible loss of up to 500 jobs.

Operations at Glencore’s Blakefield South underground mine will continue as planned until 2017, when its final longwall panels have been mined.

“Glencore is one of the most efficient longwall miners in Australia, but we are not immune from the ongoing market challenges,” the company said in a statement.

“Unfortunately, the current market does not support the proposed project and we have decided to place Blakefield North on hold until we see improvement in the economic climate.”

Glencore’s open cut mine at Bulga – which last year received regulatory approval to extend its mine life until 2035 – will not be impacted by the decision.

“We remain confident of coal’s medium to long-term outlook and that our Hunter operations will play an increasingly important role in meeting this future demand,” Glencore said.

“Presently, however, we have to ensure that the volumes and qualities of coal we produce are aligned with market requirements. We will not push incremental tonnes into markets that don’t want them or need them.

“Consultation with Bulga Underground employees has begun this week.

“We appreciate this decision will have impacts on our employees and their families as current underground operations reach the end of their scheduled life in 2017, as well as the local communities and businesses supported by our underground operations.”