SYDNEY—Australia's mining industry is shedding jobs at an accelerating pace, with companies that enjoyed a decadelong boom axing thousands of workers as the value of commodities including coal and gold fall to multiyear lows.

More than 1,000 jobs have been cut this week alone in the mining sector, underscoring the challenge facing Prime Minister Kevin Rudd, who returned to power late Wednesday promising to cushion the economy from the impact of slowing resources investment.

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