MINING 080721 AFR PICTURE BY PETER BRAIG / Generic pic. BHP Billiton Mitsubishi Alliance, BMA is austalia s largest metallurgical coal miner and exporter, Goonyella Riverside Mine near Moranbah, Bowen Basin, queensland, australia SPECIALX 210708 SPECIALX 210708

Left behind: Latest closure from BMA will result in the loss of 300 jobs, while Xstrata will shed 600. Photo: Peter Braig

AUSTRALIA'S coal industry continues to shed workers, with more than 2000 jobs lost this year as thermal and metallurgical coal prices slide, costs rise and Chinese demand softens.

The BHP Billiton Mitsubishi Alliance (BMA) yesterday confirmed it would close the Gregory open-cut project, the industry's fifth mine closure this year, with the loss of 300 jobs, and Xstrata Coal said it would sack 600 workers across Queensland and New South Wales.

The downturn in the sector is so rough that staff at Rio Tinto's Coal & Allied subsidiary are being told to cut back on witches hats and recyclable cups.

In an internal memo on Thursday, the general manager at C&A's Mount Thorley Warkworth division, Cam Halfpenny, warned of a ''culture of waste'' that needed to improve, telling workers the operation used 800 witches hats a month - at $8 each - costing $80,000 a year.

Staff were also getting through 1400 recyclable cups a day, costing $120,000 a year.

Markets for both thermal and semi-soft coking coal products have softened significantly over the last two quarters, which, alongside the strong Australian dollar, was ''resulting in very real profitability pressures on our business'', Mr Halfpenny said.

''[We] must react to this pressure with a change to our cost structure and spending habits.''

Mr Halfpenny said Mount Thorley Warkworth's costs per tonne were higher than current spot coal prices and although contract prices were high, ''we need to position the business to be sustainable should current spot prices persist''.

The Gregory closure, effective next month, follows BMA's Norwich Park shutdown in May, with the loss of about 500 jobs.

Andrew Vickers, general secretary of the mining and energy division of the CFMEU, said union delegates would meet at Mackay today to consider the enterprise bargaining agreement reached after protracted industrial disputes in Queensland. Fresh strike action was ''unlikely'', he said.

Mr Vickers reckoned more than 2000 jobs had been lost this year, including 400 in Rio Tinto's closure of the Blair Athol mine and downsizing at Clermont, and another 200 lost due to Anglo's closure of Moranbah North.

''Mining companies are doing what they have always done, they start sacking people before they know exactly what's going to occur,'' he said.

During the global financial crisis about 2500 jobs were lost, mainly in the Queensland coal industry, Mr Vickers said, but nearly all those workers were back on in six months.

He did not expect a similar rebound this year, because world coal supply had increased.

In early August Xstrata Coal chief Peter Freyberg told investors at the company's half-yearly earnings results in London that thermal coal prices were recovering and the market had ''probably bottomed about a month ago''.

Not all Xstrata Coal's job losses will be in the mines: the company is also consolidating three Queensland offices into one and cutting roles at its Sydney headquarters.

Xstrata said approved growth projects, such as Ravensworth North, Ulan West and the Rolleston expansion, were proceeding as planned.