UP TO 100 workers are set to lose their jobs at Rio Tinto's Kestrel mine complex, north of Emerald.
Workers coming on and off shift today were told of the decision to shed the jobs by the end of the month.
It is believed to be a mix of permanent and contract jobs in the firing line.
Central Highlands Mayor Peter Maguire said he had been briefed on the situation.
"There are going to be some full-time positions involved," Cr Maguire said.
"It is unfortunate any way you look at it, because some of the people involved will live in this town and it is going to have further impact on our numbers."
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Rio Tinto will begin a consultation process with the outcome to be known by workers at the end of September.
"The Australian coal mining industry is facing extremely challenging conditions, with prices continuing to decline through 2014 and the Australian dollar remaining strong," a spokesman said.
"We have worked to significantly reduce costs and improve productivity across all of Rio Tinto's Australian coal mines, but still more needs to be done.
"Regrettably, a number of roles at the Kestrel Mine need to be reduced, as part of ongoing efforts to ensure the operation is competitive.
"We will be consulting with all employees about these changes and providing support for those affected."
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