The Australian mining industry is bracing for more job losses and mine closures next year as coal and iron ore prices remain depressed, The Sydney Morning Herald reported.
A report by Newport Consulting confirms how bleak the situation has become in Australia as it found that nearly 80 percent of mining leaders are reducing capital expenditure, up from 44 percent last year.
While mining company bosses are still reluctant to spend money or make investments, the latest Newport Mining Business Outlook Report shows 16 percent of mining leaders are cautiously optimistic about their growth prospects for the next 12 months.
Newport managing director David Hand said more job losses were expected as coal and iron ore miners fight to remain competitive.
"Miners are likely to make decisions in the next 12 months to shut more operations and that is probably the most likely outcome," Hand said.
"There are thousands of jobs hanging in the balance right across NSW."
The report says coal mining operations in the Hunter Valley in NSW are likely to be affected by weak prices, and a similar story is expected to play out in Western Australia with Pilbara iron ore producers.
"It's a pessimistic view, looking at everybody below Rio Tinto and BHP," Hand said.
"There's not a lot of optimism about the price of iron ore."
Further price falls would have a significant impact on small to mid-tier iron ore miners such as Atlas Iron, Hand said.
Atlas shares have plunged 70 percent this week after resuming trading and reopening mines following a capital raising.
Still, Australian miners were among the most innovative and entrepreneurial businesses and they would quickly make big changes to survive and boost productivity.
"It's grim, but there's a future," he said.
Iron ore is trading just above $US50 per tonne as the Chinese share market wobbles between losses and gains.
The Newport survey also found that for the first time in three years, there was a flicker of life in the mining sector following a five-year low in confidence in 2014.
But it said the proportion of mining leaders showing no signs of optimism remained high at 84 percent, although that number had eased from 93 percent.