A union leader has questioned the reasons for closing a Queensland coal mine, with the loss of 200 jobs.

A Queensland coal mine slated for closure after Christmas is profitable and achieved record productivity this year, a union leader says.

US-based company Peabody Energy has announced it will shut down its Wilkie Creek mine in the Surat Basin, 30km northwest of Dalby, with the loss of around 200 jobs.

Construction, Forestry, Mining and Energy Union (CFMEU) vice-president Shane Brunker said workers were shocked by the announcement.

He questioned whether it was linked to collective agreement negotiations with workers which have already been put on hold.

Mr Brunker says he suspects Peabody has agreed to sell the mine and is trying to sweeten the deal for the new owner.

“They face a lengthy legal battle if they are,” he told AAP.

“It’s a profitable mine, they have had record productivity this year.

“It’s only that it doesn’t fit the Peabody portfolio.”

Earlier the CFMEU said Peabody had told them that rising costs and falling coal prices left it with no choice but to close the mine.

“We are committed to minimising the impact of the closure on our employees, their families and the local community, and we intend to work with employees regarding redeployment to other operations where possible,” Peabody Energy Australia president Charles Meintjes said in a written statement.

The firm describes itself as a leading coal producer and reserve holder in Australia with 11 operations in Queensland and New South Wales.

Dalby’s mayor Ray Brown said the job losses will be a huge blow to the community.

“Our greatest resource in our region is not our resources, it’s our people and to have that many lose jobs so close to Christmas is really sad,” Mr Brown told AAP.

A spokeswoman for Peabody Energy told AAP the mine was still up for sale after lower market prices and higher costs had forced the decision to close it.

She said the company was focusing on the development and expansion of its metallurgical coal mines in Queensland’s Bowen Basin.