Mining company Glencore announced on Thursday afternoon it would shed 40 jobs from its mine at Tahmoor, west of Wollongong.
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Employees and staff at Tahmoor were informed that one of the mine's development crews would be made redundant from July 1, affecting about 40 full-time employees and contractors.
The company said the move was aimed at addressing "significant economic pressures presented by the difficult Australian coal market".
Support services were being put in place for employees affected by the changes and redeployment options across the company's operations were being investigated, Glencore said.