Rio sold its 50.01% interest in the Clermont mine to the Glencore Sumitomo JV GS Coal for $A1.015 billion last year. Now it intends for coal operations spending to be cut in a program headed by energy chief Harry Kenyon-Slaney.

A spokesman told MiningNews.net sister publication International Coal News: "Like others in the Australian coal mining industry, Rio Tinto is facing the challenge of increasing costs and dropping coal prices.

"We are working to improve productivity and reduce costs across our mines.

"Regrettably, this means some roles at Hail Creek Mine are no longer required, as part of changes to ensure the mine is sustainable in challenging conditions.

"Consultation processes are in progress and we will be providing support for those affected."

Rio Tinto's energy division is on target to deliver another $1 billion in cost savings despite reducing unit costs of coal production by 25% in the last 12 months.

Kenyon-Slaney told a recent conference that the company, which had increased coal production by 10% in the last year, was comprehensively reviewing costs at all of its operations.

"We have set ourselves a target to deliver $1 billion in cost savings by the end of 2014," he said.

"We've established a war room to tackle costs - focusing on streamlining maintenance procedures, consolidating contractors and improving procurement practices and cutting wastage."

Kenyon-Slaney said while the cost savings to date had been significant, the company would be persevering with paring back costs in the current year.

"This is a truly significant step-change in the competitiveness of our business and we're not done yet," he said.