The mine was bought from Shell by Allied Coal, part of the Allied Group that comprises contracting division Allied Mining and equipment hirer Allied Plant Services. Shell abandoned longwall mining at the mine due to difficult ground conditions and when Allied took over floor heave in places was up to 2m in height.

Allied Coal spent the early part of last year recovering deteriorated roadways and preparing for longwall mining. During the 2000-01 financial year the mine produced 1.017Mt of ROM coal, with the longwall producing just under 500,000t during the period. Longwall production for the September 2001 quarter was 66,045t ROM.

Chairman of Allied Coal Holdings, John Williams, said he was deeply saddened by the necessity to close the mine and the subsequent loss of jobs.

“Allied Coal pursued every avenue in an effort to keep the mine open, but with the age of the mine and its falling production levels relative to high operating costs, it was not commercially feasible to keep it going,” said Williams.

He added that other companies in the Allied Group, including its plant hire services division, were continuing business as usual and that the mine’s closure would not cause further job losses in other Allied Group companies.

Russell Middleton, Allied Group’s chief financial officer, said the remaining coal in the mine had become increasingly difficult to extract.

“Geological fault structures delayed longwall production and the impact of rockfalls significantly damaged critical equipment. Machinery downtime and maintenance adversely affected production. Ground conditions were deteriorating and as a result of a cavity forming over the longwall face two weeks ago, our confidence in potential production rates evaporated.”

Middleton said he would be arranging payment today from the employee entitlements fund to cover terminated employees’ wages, holiday and sick pay and a contribution towards redundancy.

“The remaining redundancy and superannuation payments will be made as soon as possible following the sale of hard coking coal now on the ground and ready for sale,” he said.

The longer term future of the mine and equipment is yet to be determined.