BHP cuts 750 Queensland coal jobs

BHP (ASX: BHP) and Mitsubishi, as BHP Mitsubishi Alliance’s (BMA), will suspend operations at the jointly owned Saraji South coal mine with the operation being place in care and maintenance in November 2025.

The companies attributed the closure to consistently weak metallurgical coal prices and the impact of the Queensland Government’s coal royalties — a scheme introduced in 2022 when coal prices were significantly higher.

BMA president Adam Laney says the Queensland coal industry is approaching a crisis point.

“As joint owners of BMA, BHP and Mitsubishi do not want to see operations paused or jobs lost,” he said.

“These are necessary decisions in the face of the Queensland Government’s unsustainable coal royalties and market conditions.”

Under the scheme, Queensland coal miners pay a royalty of 20% for prices more than $175/t, 30% for prices more than $225/t and 40% for prices more than $300.

The Australian Resources & Energy Employer Association’s (AREEA) 2024 Resources and Energy Workforce Forecast report last year predicted Queensland’s mining sector would suffer under the coal royalty increase.

Queensland Resources Council (QRC) chief executive Janette Hewson says the impact of the royalty tax increase coupled with a drop in coal prices and soaring production costs is simply making it unviable for many coal producers to continue operating.

“QRC warned the [Federal] Government about the consequences of introducing the world’s highest coal royalty rates,” she said.

“We have continued to raise industry’s concerns with the [Queensland] Government. However, by accepting bad policy, they have cost jobs for Queenslanders.”

BMA is the state’s largest metallurgical coal producer, directly employs more than 9000 people and, in the past decade, has also paid more than $21b in royalties to the Queensland Government, with $1.5b contributed in FY25 alone.

Last month, BHP warned that the state of the Queensland coal industry could force the company to reassess mining operations throughout the state after it saw a 26% decline in attributable profit for FY25.

BHP’s FutureFit training academy in Mackay, Queensland, is also facing a strategic review as part of the company’s effort to decrease labour costs.

AREEA chief executive Steve Knott says instead of protecting and strengthening the industry, the current coal royalty regime is actively undermining it.

“Unless urgent action is taken to reset the royalty system to competitive, sustainable levels, more mines will close, more jobs will go and the economic foundations of Queensland will be permanently weakened,” he said.

“These punitive taxes are now seeing global investors walk away from Queensland, which has long been one of the most attractive mining jurisdictions in the world.”

Shadow Minister for Resources and Senator for Queensland Susan McDonald says anti-mining and anti-investment policies are crippling Queensland miners and now costing Australian jobs.

“This is a dire warning that Australia is becoming uninvestable and this threatens the first-world lifestyles mining provides,” she said.

“Since [the Queensland Government] brought in the highest royalty rates in the world, times have changed, and cost of production has skyrocketed.

“There is a real need to investigate whether these royalty rates are having a negative impact on Queensland’s economy and the future pipeline of resources investment.”

But some industry voices are critical of how much sway royalties had on this decision.

The Mining & Energy Union (MEU) is calling on BHP to be transparent with workers and consult immediately about their plans.

“BHP should stop using coal workers and communities as pawns in its fight with the Queensland Government over royalties,” MEU Queensland president Mitch Hughes said.

The Saraji South mine near Dysart was formerly known as Norwich Park. It was previously mothballed by BHP in 2012 until being reopened as Saraji South in 2020, as part of the Saraji complex.

“It’s very disappointing to see BHP close a mine as soon as coal prices come off the boil,” said Mr Hughes.

“But they have form in turning this mine on and off to chase high coal prices, with no regard for the community or workforce impact.”

Mr Hughes says BHP blaming job cut decisions on Queensland’s royalties regime was disingenuous — with the higher rates of royalties only kicking in when prices were very high.

“Even with higher royalties, BHP profited immensely from the coal price spike of [FY23], which saw coking coal spot prices peak at over $900/t,” he said.

“BHP has been pursuing a divestment strategy in Queensland coal since before the new royalty rates were introduced in 2022.

“Coal prices have come back to more normal levels, but to fear-monger about a ‘crisis’ in coal is misleading and frankly shameful behaviour from BHP.

“Our high-quality coal belongs to all Queenslanders, not to BHP. If BHP want to focus on other parts of their business, they should get out of the way and let someone else operate these great central Queensland mines.”