Ikeshima Mine, one of Japan's two remaining coal mines, will cease operation by the end of this year, industry sources said Wednesday.
Mine operator Matsushima Coal Mining Co. and its parent firm, Mitsui Matsushima Co., decided it is not commercially viable for the mine to continue business, given the strong price-cutting pressure from customers in the face of cheaper imports, the sources said.
Also behind the decision to close the mine, located in the town of Sotome, Nagasaki Prefecture, is the central government's plan to terminate subsidies for domestically produced coal at the end of the current fiscal year, the sources said.
Matsushima Coal will inform its labor union of the decision around Oct. 15, the sources said.
Electric utilities, major consumers of coal, have asked Matsushima Coal to cut prices to less than 10,000 yen per ton from the current 13,000 yen in three years, a request that would deepen the plight of the company, which is already suffering an excess of liabilities over assets.
Ikeshima Mine was also forced to reduce its annual production of 1.2 million tons to one-third after a tunnel fire tore through the mine last year.
Matsushima Coal will liquidate the mine at the end of November and all of its 1,000 workers will be dismissed, the sources said.
The workers may be absorbed by a company to be established by the Nagasaki Prefectural Government, the Sotome Town Office and Mitsui Matsushima to launch a training program for foreign engineers under a five-year national project to transfer mining technology to other countries. keshima Mine began operation in 1959. Its closure leaves Taiheiyo Coal Mine in Asahikawa, Hokkaido, as Japan's sole remaining coal mine.