“This is in response to ongoing economic challenges caused by lower prices driven by an oversupply of coal in the global export market,” Glencore said.

“We expect Collinsville will continue to operate at reduced capacity for the remainder of 2015 as we investigate alternate marketing opportunities for the operation and revise mining plans.”

The cuts will lower the Collinsville workforce headcount from 340 to 260 and its annual production will fall from a previously planned 4.8Mtpa to 2.8Mtpa.

Glencore said it would look at options to redeploy the retrenched workers to other Glencore operations.

“It is a particularly difficult decision given the significant effort and the improvements made at Collinsville over the last 18 months in attempting to turn around the mine’s financial position,” the mining house said.

“The situation at Collinsville reflects the challenges being faced by all Australian coal mines in one of the most difficult markets in the industry’s recent history.”

Consultation over the changes with the Collinsville workforce started on Tuesday.

Glencore reopened the Collinsville mine on an owner-operator basis in January 2014.

The mine was operated on contracts during the previous 17 years, with Thiess losing this role in late August 2013 following Xstrata’s merger with commodity giant Glencore.

A key change brought in by Glencore included redesigning the mine plan to bring in larger scale, productivity-boosting equipment.

The mine produced 2.9Mt of coal in 2014. Glencore is targeting a reduction of 15Mtpa of export coal capacity across its Australian mines in 2015 with the Collinsville cutback being the first in Queensland.

Other cuts included the March announcement to close the West Wallsend longwall mine prematurely in mid-2016 (longwall production is forecasted to reach 3.2Mt in 2015) and the April-announced reduction of 2Mt of production from the Ulan West longwall mine (costing about 80 jobs).

The Mt Owen open cut mine, operated by Thiess on behalf of Glencore also shed about 80 jobs earlier this month with the associated production cut not disclosed.