Investors reacted positively to the news that BHP Billiton and Mitsubishi are cutting 700 jobs at a joint coal venture in Australia.
Shares in BHP Billiton went up by 0.92 per cent to 1,746.5 pence on the London Stock Exchange this morning, while Mitsubishi shares rose by 0.7 per cent $5.79 on the New York Stock Exchange.
Consisting of seven coal mines and a coal terminal in Queensland in the north of the country, the venture is the world's biggest exporter of the coal used in steel-making.
But market conditions are tough, which is why the two companies have decided to make the cuts. It will amount to a loss of seven per cent of the venture's total work force.
"The coal industry continues to face challenging market conditions and had to act to ensure the long-term viability of the business," the BHP Billiton-Mitsubishi Alliance (BMA) said in a statement.
BHP Billiton has described its coal unit as one of its “four pillars of growth” along with iron ore, copper and petroleum products.
But the company has recently faced pressure to reduce its operating costs because of a slump in the prices of iron ore and coal – both materials are used in the production of steel.