Syntech produces 1.4 million tonnes of thermal coal a year from the Cameby mine and has reserves of 440Mt.

Yanzhou said it was forced to lay off the workers at Ashton's northeast open-cut mine, which stopped full-scale operations last year.

Yanzhou’s local subsidiary Yancoal had been hoping an application for its southeast open cut would be approved by the NSW government, but the DA for the Upper Hunter mine – which was lodged in 2009 – has been met with opposition from local indigenous group the Plains Clan of the Wonnarua People.

The 18 retrenched workers had been carrying out limited activities around the mine since December. The remaining 90 workers are expected to be retrenched in the next two months if the DA is not approved.

Yanzhou Coal is reportedly ready to raise $1 billion for Yancoal on the Australian Securities Exchange by the end of the year after walking away from an acquisition of Whitehaven Coal.

The company would sell approximately a third of Yancoal, which owns the Moolarben and Austar mines in New South Wales, through an initial public offering, according to Bloomberg.

Investor relations manager of Brisbane-based Yancoal Australia Ian McAleese said it had a “strategy to be IPO ready by the end of 2011”

“We would like to have our prospectus ready to be able to take advantage of market conditions,” he told Bloomberg.

“The preferred way to do this is to sell more stock than 30 per cent of the total value.”

Yanzhou, which paid $3.1 billion for Felix Resources in 2009, operates four mines in Australia and reported a net income of $415 million last year.

In gaining Foreign Investment Review Board approval to acquire Felix, Yanzhou agreed to float Yancoal on the Australian Securities Exchange by the end of 2012 and to own less than 70% of the company at that time.