FUELLING the fire of its long-running battle with mining unions, the BHP Billiton Mitsubishi Alliance (BMA) has declared that it will cease production indefinitely at its Norwich Park coal mine in the Bowen Basin. The announcement came as unions planned to start a 36-hour strike at seven BHP-run mines, including Norwich Park, despite a BMA warning in February that the mine had become unprofitable.
In a statement, the company said that the mine had been losing money for several months due to a combination of reduced production and processing rates, as well as significant cost increases.
It said the decision to end production followed a seven-week mine review that was unable to establish any immediate remedies that would allow Norwich Park to return to sustainable profitability.
“The decision was not made lightly. However, the impact of last year’s flood, combined with lower cost prices and high costs, has resulted in an operation that is not currently viable,” BMA asset president Stephen Dumble said.
“While recent industrial action has had an impact on production, the mine has been unprofitable for some months,” he said. “As a result, we have had to take urgent steps to both stop the losses
and find the best way to secure the operation’s longer-term future.” Mr Dumble said the closure was not a reflection of the viability of the rest of its Queensland coal assets and that BMA would now focus on measures that would enable Norwich Park to operate as a sustainable, profitable and low-cost mine.
However, he added: “until we find viable solutions for the future of the mine, we will not re-start operations. “We understand that this decision will have a significant impact on our employees, their families, and the Dysart community, and we are committed to supporting them during this period,” he said.
BMA plans to redeploy as many Norwich Park employees as possible to its nearby Saraji coal mine, to enable those employees and their families to remain in Dysart. The 16-month battle between BMA and three mining unions – includingthe Construction, Forestry, Mining and Energy Union (CFMEU) – is purported to be more about conditions and operational issues than pay.
On April 16, Queensland District CFMEU Mining and Energy Division president Stephen Smyth wrote an open letter to Premier Campbell Newman, calling for BMA to forfeit its Norwich Park lease unless production resumed.
“Our union believes that at the height of the present mining boom, there is no reason why this mine should cease production,” Mr Newman said. “We believe that any mining company given a lease to mine ourvaluable mineral reserves should forfeit its lease if it is not prepared to operate the mine,” he said.
“Simply allowing a mining company to mothball a valuable lease without
any consequences for its actions sets a dangerous precedent for other operators.”