The Chinese-owned company said on Friday that Austar would go into "care and maintenance" from the end of March, as "works within the current mining area reach completion".

Yancoal said it would "continue to evaluate mining opportunities to recommence production in the future".

It said Austar employed 137 people, and that voluntary redundancy would be offered to all employees.

However, it needed 44 people to maintain the mine from April onward, and would try to place Austar employees at its other operations.

Yancoal would not say why Austar was going into care and maintenance beyond saying that mining was about to finish in the area being worked.

It had consulted with unions and employees about the future workforce arrangements.

The Austar lease has been mined under various names since 1916, including as the Pelton/Ellalong colliery. Yancoal bought the mine, then known as Southland, in 2004.

Its main product is a high-value semi-soft coking for use in steelmaking, but its lease sits in a difficult area geographically. The mine has shut and reopened a number of times over the years.

Austar only resumed operations in August 2018 after the NSW Resources Regulator lifted prohibition notices following coal burst incidents earlier that year.

These incidents followed the deaths of two miners, Phillip Grant, 35, of Metford, and Jamie Mitchell, 49, of Aberdare, in an underground wall collapse in April 2014.

Georgina Woods, a spokesperson for environmental group Lock The Gate, said Yancoal's announcement showed the need for the NSW Government to put money into a diversification strategy for Hunter mine workers.

"The region is vulnerable to these sorts of sudden market decisions made a long way away from us," Ms Woods said.

Federal Hunter MP Joel Fitzgibbon noted the mine's challenges over the years and said the closure was not a reflection of the industry, which would "remain a major employer and generator of economic wealth in the Hunter for many decades to come".

Mining union spokesperson Peter Jordan declined to comment on the lay-offs.

This story originally appeared on The Newcastle Herald