The plant, which makes dippers and ballast boxes for Cat’s electric-powered mining shovels, will see its workload transferred. Ballast box production will go to its South Milwaukee, Wisconsin, plant while dippers will now be made in its Wamego, Kansas, facility.

The company said the decision to close was made to “align costs with the environment”, as mining machinery demand continued to wane.

“We recognise this will impact our work force and their families, but after considering a number of options and alternatives, we have concluded we need to take this step to achieve a more sustainable, long-term cost structure,” the OEM said Tuesday.

The transfers and shutdown are expected to be completed by year’s end.

Cat acquired the Kilgore plant as part of its $US8.8 billion takeover of rival equipment producer Bucyrus in 2011.

The company has already taken several slices to its workforce, cutting workforces in at least two states and shutting smaller plants in South Carolina, Minnesota, Virginia and Sudbury, Ontario, Canada.

The OEM reported last week in its third-quarter results that sales of its mining equipment dropped 42% year-on-year to $3 billion.

Its income from mining machinery dropped 63% to $409 million on lower commodity prices and suspended mine expansion efforts.

Chairman and chief executive Doug Oberhelman said that Cat would be going on a “cost-lockdown binge” to counter the falling demand.