As many as 158 workers at the Tahmoor Colliery will be out of work by September after Xstrata Coal announced plans to reduce its 24/7 operations to weekdays only.
The company will restructure both its Tahmoor and Ulan (near Mudgee) mines as the falling price of coal threatens "the viability of these operations".
In a statement, the company said 158 Tahmoor employees, including 57 contractors and 101 permanent employees, will be affected.
Steel industry buoyed by rescue package Xstrata Coal chief executive Peter Freyberg said the restructure is necessary "to protect the long-term financial viability of the businesses".
"We will be conducting a full and thorough consultation process with all affected employees and will make available counselling, employment and financial advisory assistance services," he said.
"Where vacancies occur at other Xstrata Coal operations, affected employees will be encouraged to apply."
The Tahmoor underground mine presently employs 493 people and produces about two million tonnes per annum of hard coking coal.
NSW South Western District CFMEU spokesman Graham White said workers had been informed of the decision on Wednesday night and the union had been in regular contact with management.
"There are other meetings (today) in the morning," he said.
"Expressions of interest for voluntary redundancies close on August 10."
He said Xstrata would then take the step of forcing redundancies from August 14. The new reduced-hours rosters begin on August 31.
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