The company said that the Burton Mine is the highest unit-cost operation, and its production levels are not viable in the current market environment.

The latest plans follow negotiations with the contractor operator and production levels would be reduced to around one million tons per year.

Peabody Energy reduced its annual average Australian cost estimate to the low $70 per ton range and expects to generate adjusted EBITDA of up to $200m.

It also reduced metallurgical coal sales target for 2014 from the Australian platform by one million tons to 15 to 16 million tons with new Australian sales targets of around 36 million tons.

The move forms part of the company’s efforts, including increased productivity, improved performance at New South Wales thermal coal mines, ongoing owner-operator conversions, and sustained cost and productivity improvement programs.