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The troubled Russell Vale Colliery, located in the northern Illawarra region, has notified its workforce of its impending closure.
Wollongong Resources communicated the decision to employees through an email on Monday, affecting approximately 145 workers.
The coal mine had come under scrutiny from the New South Wales Resources Regulator and was placed under a prohibition order that stopped work at the site after five underground fires.
On January 18, after an investigation into the fifth "friction fire" on January 5, the Resources Regulator issued the order "prohibiting all coal mining at the site because of safety concerns".
At the time, unions were told all workers were stood down without pay as the operator worked through the selection process for who would be made redundant.
In Monday's email, Wollongong Resources said the decision had been made "by our owners due to ongoing regulatory risk and lack of support".
It is understood the decision will also apply to the company's Wongawilli Colliery, which was granted approval from the state government to continue operation in 2022 after a number of safety concerns left the mine in care and maintenance.
Staff thanked for efforts
The email said it was the company's intention to "honour all our financial commitments including employee entitlements".
It further thanked staff for their efforts in trying to secure the long-term viability of the mine, however said "unfortunately despite the operation being compliant and safe to operate we cannot continue with regulatory uncertainty".
Last week, the Resources Regulator confirmed to the ABC that Wollongong Resources had lodged an internal appeal against the prohibition order.
On Friday, one of the main mining unions on the site, the Collieries' Staff and Officials Association (CSOA) defeated an application by Wollongong Resources to the Fair Work Commission (FWC) to indefinitely delay a hearing of the union's claim that it's members should not have been stood down without pay.
At the time, the union said 49 employees had exhausted their annual leave entitlements since being stood down and there was a significant amount of stress and anxiety among the workforce.
Multi-employer bargaining
Wollongong Resources' Russell Vale mine was also one of five miners being tested by the CSOA with an application to the FWC, in a bid for a multi-employer agreement.
New multi-enterprise bargaining laws are part of the federal government's recent IR reforms that allow workers across different work places to negotiate better employment terms and conditions.
In a statement, the Minerals Council of Australia expressed deep concern about the precedent that the case could set "and the damaging effect that multi-employer bargaining and industrial action could have on businesses, large and small".
The operator is expected to meet with workers on site at Russell Vale on Tuesday.
Wollongong Resources has been contacted for comment.