Australian miner Rio Tinto (ASX: RIO) is planning to axe jobs in the coal mines operation of Coal & Allied due to the drastic decline in prices of the commodity and the high currency.

Rio Tinto, which owns a majority stake in Coal & Allied, said it will reduce costs by cutting jobs to improve competitiveness as coal prices tumbled down to more than 20 per cent to below $90 to tonne because of an oversupply amid lesser Chinese demand for fuel.

Coal & Allied produces 30 million tonnes of coal yearly and has 1,500 employees in three operations in New South Wales. However, Rio did not provide the exact numbers it would cut because the decision is still in progress.

Australia is the second largest exporter of thermal coal used for power generation.

Besides coal miners, iron ore producers are also suffering from the slump in prices of the steelmaking ingredient, prompting the Macquarie Group to warn that large Australian banks could lose up to $500 million due to the slowdown in the resources sector.

The impact is not due to direct exposure to the mining industry which is not very large, but through second-round effects which could cause national unemployment rate higher and higher bad debts.

As a result of the slowdown of the resources sector, major mining firms such as Rio Tinto, BHP Billiton and Fortescue Metals Groups have postponed their expansion plans until commodity prices improve.

Two other mining groups announced their new acquisitions to diversity their earning steams while mining contractor NRW Holdings will further cut its work contracts.

NRW reduced by $5 million its contract at BHP Billiton's Port Hedland inner harbour project that is linked to the miner's Pilbara iron ore operations to $75 million from $80 million. The cut came after NRW lost its contracts with Fortescue Metals which would have generated $100 million this year for the mining contractor.

Although the Fortescue contract loss caused NRW to cut its earnings guidance to zero from 15 to 20 per cent growth, the contractor said the BHP contract reduction would no longer require the firm to revise its guidance.

Meanwhile, the Calibre Group, and engineering services company, said on Monday that it purchased the Echelon Mining Services in Queensland as it seeks more involvement in mine maintenance and optimization. Calibre used to earn 90 per cent of its revenue from early-stage work such as feasibility studies and project construction.

Also on Monday, Sedgman, a mining services company based in Queensland, announced the completion of its acquisition of engineering firm Yeats Consulting which would expand Sedgman's infrastructure service offering and market diversification.

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