BHP Billiton Mitsubishi Alliance plans to cut 230 jobs from its Saraji coal mine in Queensland as it looks to improve productivity at the operation.
The company said a recent review of the mine determined staff numbers were too high, and will begin talks with employees on how to reduce numbers.
BMA Asset President Lucas Dow said it would a difficult time for workers and contractors.
It is believed changes at the site will affect mining production, pre-strip, processing and engineering departments.
"BMA has made a number of changes across its operations to reduce costs and increase productivity in order to ensure that our operations are profitable and sustainable," Dow said.
"A recent review of the Saraji mine by the company concluded that a fundamental improvement in the cost base of the open-cut operation is required to ensure that it remains competitive."
The move comes as coking coal prices trade at their lowest value since mid-2009, with the average spot price around $US127 a tonne.
CFMEU district president Steve Smyth the union was disappointed to learn of the job cuts.
"Obviously we are disappointed that in the first instance there wasn't more dialogue about what the issues are," he told AAP.
"Now we want them (BMA) to comply with the agreement in regards to compensation."
Smyth said the cuts would come as another blow to the small town of Dysart which was rocked by the closure of BMA’s Norwich Park mine in 2012.
Queensland Resources Council chief executive Michael Roche says the job losses at Saraji are an unwelcome reminder of domestic cost pressures and soft market conditions.
"There are few other options available to keep an export mine viable under these circumstances and this is a bitter pill to swallow for everyone concerned," he said.