The Swedish multinational made the announcement of the job cuts last week, the second round of redundancies since the plant opened in March last year.

In a statement, Sandvik Asia Pacific president Rowan Melrose blamed the decision on a downturn in the global and Australian mining sectors, saying little had changed since the company laid off nine workers late last year.

"Since we announced some redundancies at this site in December 2012, forward orders have slowed further," he said.

"Over the past few months, Sandvik management has done everything it can to avoid further redundancies at our Newcastle facilities. We have restructured our workflows, redeployed employees to other worksites and cut overtime to reduce costs as much as possible in order to keep our trained workforce."

The decision does not come as a surprise. In its quarterly report released last month, the company said weak activity in the mining industry noted in the second half of 2012 had continued in the first quarter of 2013 and demand in Australia from coal and iron ore mines remained particularly weak.