The Australian mining sector received more bad news when it was reported that employment in the country’s mining industry has fallen for the first time in three years.

This news comes on the heels of numerous cut backs and project delays by some of the major mining companies operating there.

Government data that covers the three months to August showed jobs in the mining sector fell by a net 4,600, following an increase of 25,500 in the three months to May.

Total employment in the industry was still up 44,600 on the same period last year, but it was the first quarterly drop since mid-2009 and comes amid news of more layoffs by miners facing weak prices and high costs, Reuters reported.

Any pullback in mining would be a blow to the economy as it has been a big generator of jobs in recent years. While the industry’s workforce of 270,600 is barely more than 2 percent of the country’s 11.5 million employed, it has been growing rapidly.

Since early 2007, when Australia's mining boom really got going, the sector has generated almost 133,000 jobs. That was beaten only by healthcare and the professional, scientific and technical services sector.

Crucially the growth in mining had helped offset weakness in manufacturing, which has shed 65,000 jobs in the same period as a high local dollar and stiff foreign competition forced much painful restructuring.

Miners BHP Billiton, Xstrata Plc and Fortescue Metals Group's have all announced job cuts in the past couple of weeks as they battle weak prices, rising costs and a strong Australian dollar.

This could be a repeat of the job shedding seen during the global financial crisis in 2008/2009, when mining employment fell by 27,400 over six months.

At the time, hiring rapidly recovered as massive policy stimulus in China revived the demand for commodities. China is Australia’s single biggest customer, taking more than a quarter of its exports, much of it iron ore.

But this time China has been more reluctant to stimulate its economy, leading to sharp falls in prices for some of Australia's key commodities, including iron ore and coal.

While Australia’s jobless rate is still at a low 5.1 percent, annual employment growth is a very sub-par 0.5 percent. If it were not for more people leaving the workforce, the unemployment rate would be nearer 6.0 percent now.