A spokesperson for South32 said Illawarra Metallurgical Coal had made changes to contractor arrangements at the Appin mine.

This coincided with the end of commercial agreements with some labour providers and a recent mine change.

“It was also in response to uncertainty due to COVID-19, coupled with lower pricing and demand for metallurgical coal,” the spokesperson said.

South32 expects to be better equipped to operate through the commodity price cycle with such changes, stating that safety is its “absolute priority at all times.”

South32 hired 1175 employees at the Appin mine as at May last year, 44 per cent of which were contractors.

The company produced 1.36 million tonnes of coal from Illawarra Metallurgical Coal in the March quarter of this year, a drop of 16 per cent from the previous period.

Illawarra Metallurgical Coal has been producing hard coking coal for steelmaking internationally and domestically for 80 years.

South32 plans to return Illawarra Metallurgical Coal to a three longwall configuration in the June quarter.