BHP cuts Australia coal mine jobs as cost pressures mount

Hard coking coal contracts for the first quarter of 2014 have fallen to their lowest on record to stand at $143 a tonne, down 6 percent from $152 in the fourth quarter of last year.

The BHP Mitsubishi Alliance joint venture said it was consulting employees at its Saraji Mine in Queensland state about the job losses to ensure "ongoing competitiveness and viability".

The mine produces up to 8 million tonnes each year of coking coal, used to make steel. The nearby Norwich Park and Gregory mines have already been closed by BHP and Mitsubishi in response to lower demand.

Uncertainty surrounds the future of coal mining, Australia's second-biggest generator of export earnings after iron ore.

In the major export market of China, efforts to expand the network of rail haulage lines could fuel domestic coal mining at the expense of imports.

The country aims to expand rail hauling capacity by 30 million to 40 million tonnes annually over the next five to eight years.

Its raw coal production capacity is estimated at 4.1 billion tonnes. Expansion plans could add around 860 million tonnes of capacity in the five years to 2015, industry forecasts show.

As a result, there is no guarantee that China represents a growing long-term market for major coal exporters, says Gerard Burg, a senior economist at National Bank of Australia.

BHP and Mitsubishi employ more than 10,000 workers in the coal-rich Bowen Basin, where its mines are located.

(Reporting by James Regan; Editing by Clarence Fernandez)