Glencore has announced a Christmas shutdown of its Australian coal mines amid weak global demand.

The Swiss-based mining and commodities trading firm is Australia's largest coal producer, with 20 mines at 13 complexes across New South Wales and Queensland.

The company said the mines employ 8,600 people and produced over 80 million tonnes of coal last year.

However, this year Glencore is planning to shut the mines down for three weeks from mid-December, due to the current global oversupply situation.

Staff will be forced to take annual leave over the period, and any staff who do not have enough leave will be required to bring forward some of next year's holidays.

The company said in a statement that the shutdown will reduce the need "to push incremental sales into an already weak pricing environment."

Prices for the thermal coal (used in power stations) that dominates Glencore's Australian output have roughly halved over the past three years from around $US110-130 a tonne to just over $US60 a tonne.

Glencore said the shutdown will cut output from its Australian operations by around 5 million tonnes.

"If the market is depressed, as it has been, then there's obviously got to be some sort of financial stress and by taking that supply out of the market would support prices," said Jonathan Barratt, the chief investment officer at Ayers Alliance.

"If they restrict supply, support prices then they might not have to close mines as a result."

Glencore said it remains confident that demand growth for its coal will restore the supply and demand balance over the medium term.