Australia’s biggest mining company will cut hundreds of jobs and mothball one of its oldest sites, after claiming the state-based business has reached a “crisis point”.
About 750 jobs will be axed across Queensland and the Saraji South mine in the Bowen Basin will be placed into care and maintenance from November.
The BHP Mitsubishi Alliance said while the 50-50 joint venture company didn’t want to see operations paused or jobs lost, the state’s coal royalty scheme was causing issues.
“These are necessary decisions in the face of the combined impact of the Queensland government’s unsustainable coal royalties and market conditions,” alliance asset president Adam Lancy said in a statement on Wednesday.
“The simple fact is the Queensland coal industry is approaching a crisis point.”
Queensland’s Liberal National government has refused to make any changes to the state’s progressive royalty regime introduced by the the previous Labor regime, saying it’s locked in until 2029/30.
The former government introduced the tiered system in 2022, delivering lucrative royalties from mining companies and taking more when coal prices are high.
It earned the state billions of extra revenue but drew the ire of mining companies and lobby groups who described it as the world’s highest coal royalty taxes.
“This is now having real impacts on regional jobs, communities and small businesses,” Mr Lancy said.
“The uncertainty this creates for our people and our communities is not taken lightly, and we will do everything we can to support them.”
BHP also warned it would not make any new investments in Queensland “under the current conditions”.
The Queensland Resources Council is a vocal critic of the tiered scheme, saying it will deter investment in new projects.
The soon-to-be mothballed Saraji South project is one of the alliance’s five steel-making coal mines in central Queensland and one of the longest running, with operations starting in 1974.
Also under review is the BHP FutureFit Academy in Mackay, north Queensland, which trains workers joining the industry and currently has about 100 newcomers.