One of Queensland’s biggest coal miners will cut about 750 jobs across its operations, blaming the impact of high royalties imposed by the state government.
The BHP Mitsubishi Alliance says its Saraji South mine at Dysart will be mothballed from November.
The Mining and Energy Union said it understood the 750 jobs will come from corporate and support roles across all of BMA’s Queensland business, including rail ports and coal, and the process of cutting workers began months ago.
About 72 miners at Saraji South are expected to be affected when it is closed in November.
The company would also put its own training academy in Central Queensland under a microscope.
The FutureFit Academy in Mackay has already trained more than 400 apprentices and trainees.
The South Saraji Mine is to be shuttered by owners BMA this November. (ABC Rural: Kim Honan)
Industry at ‘crisis point’
BMA asset president Adam Lancey said in a statement on Wednesday the company did not want to see jobs lost, “but these are necessary decisions in the face of the combined impact of the Queensland government’s unsustainable coal royalties and market conditions”.
“The simple fact is the Queensland coal industry is approaching a crisis point,” Mr Lancey said.
“This is now having real impacts on regional jobs, communities and small businesses.
“The uncertainty this creates for our people and our communities is not taken lightly, and we will do everything we can to support them.”
Adam Lancey said the mine will be shuttered in November. (Supplied: Queensland Resources Council)
Mr Lancey said the royalty rates imposed on BMA were applied on revenue, not on profits, based on the price of coal sold.
He said while the progressive scheme should mean the company was benefiting from big profits while paying more to the state, the increasing cost of doing business meant that was no longer the case.
“We’re losing the good times to then not be able to sustain us through the tougher times,” he said.
The mining boss was also asked if Saraji South might one day be reopened using contract workers instead of full-time staff.
He said that was not part of BMA’s plan, but if the mine was ever to restart “that’ll be a decision that’ll be taken at that time”.
Regarding the Mackay training facility, Mr Lancey said those already learning at the FutureFit Academy in Mackay would be supported to find jobs within BHP, even as its future now remains unclear.
The Saraji South Mine, formerly Norwich Park, was last mothballed by BMA in 2012 due to falling coal prices. (ABC News)
BMA behaviour ‘unAustralian’
Deputy Premier Jarrod Bleijie said the government was “doing everything we can” to make sure the state supported mining businesses.
“We are not at war with the mining sector, we are approving leases and mining approvals far more efficiently and quicker,” he said.
He called on the company to do whatever it could to protect and support its worker who were now “going through a pretty difficult process and stage at this time”.
Deputy Premier Jarrod Bleijie called on BMA to support and protect its workers. (ABC News)
But Mr Bleijie said it was “unAustralian” for the company to put its Mackay training centre in doubt.
“I think that is unAustralian. I think they should keep investing,” he said.
“They have made billions of dollars from the resources owned by Queensland taxpayers and Queenslanders, and they should keep investing in the future of young people who want a job in a mine or a resource sector in Queensland.”
Mining industry says coal royalties ‘wildly’ underestimates revenue
Mr Bleijie said his government had vowed not to tinker with the royalty regime before its election.
“We had an election commitment not to adjust the royalty regime and we’ve stuck by the election commitment, so it’s no surprise to BHP — a multi-billion-dollar company.
“That was our commitment to the people of Queensland.”
‘Cut royalties’ says LNP MP
The federal Member for Capricornia, Michelle Landry, whose electorates takes in Dysart, said losing 750 jobs in a small region would have a big impact.
“It’s not just Dysart that’s impacted, it’s the whole region that’s impacted because people fly-in, they drive in [to work],” she said.
Ms Landry said she supported calls from LNP Senator Susan McDonald for the state government’s coal royalties regime to be discarded.
“People might have to move, if they’re living in Dysart, looking for other work. There’s a big personal cost for the community as well,” she said.
The state’s top mining lobby group agrees.
The Queensland Resources Council on Wednesday described the royalty rates as bad policy that costs jobs.
BMA ‘spreading fear’ says union
Union delegates say workers at Saraji South only learned this morning of BMA’s plans.
Mining Energy Union president Mitch Hughes said the company must consult with its people “rather than spread fear through the media”.
“BHP should stop using coal workers and communities as pawns in its fight with the Queensland government over royalties,” he said.
“Workers need facts, certainty and security — not alarmism.”
Queensland Opposition Leader Steven Miles said he was calling on the government to help affected workers.
“[750 workers have] lost their source of income, losing the way that they support their families, and I would just call on the government to do whatever they can to either support BHP to keep these jobs or to help those workers into other jobs,” he said.
Mr Miles’ former Labor government introduced the lucrative royalties for mining and petroleum, including coal, in 2022.
Steven Miles says companies were not shuttering mines when the royalties first came in, only now when prices are falling. (ABC News)
The coal royalties regime’s three tiers has miners paying more as coal prices go up — 20 per cent at $175 per tonne, 30 per cent at $225/t and 40 per cent when prices topped $300/t.
Mr Miles said companies, including BMA, were not shuttering mines when the royalties first came in, but only now as markets have fallen.
“The coal price is now much lower than it has been over recent years and this didn’t occur when those prices were higher, which is when those aggressive coal royalties would have kicked in more substantially,” he said.
Shuttered for second time
Saraji South, formerly Norwich Park, was last shuttered in 2012, affecting 400 workers, with BMA claiming the site was no longer viable.
The alliance says the state’s coal industry is approaching a crisis point. (ABC News: Keane Bourke)
In 2015, plans were revealed showing that BMA was considering reopening the project, but only if it could use primarily fly-in, fly-out workers.
It was later reopened in 2020 as part of the larger Saraji precinct.
The union said the resources giant was being “disingenuous” by blaming royalties for the closure.
“It’s very disappointing to see BHP close a mine as soon as coal prices come off the boil,” Mr Hughes said.
“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 accused the multinational miner of “sulking” after making enormous profits when coal prices were high.
“Even with higher royalties, BHP profited immensely from the coal price spike of 2022-2023 which saw coking coal spot prices peak at over $900 a tonne,” he said.
“BHP is sulking that they had to share some of these windfall profits with Queenslanders.”
Will mining royalties ‘kill the golden goose’ or save towns?
Saraji is one of five steel-making coal mines owned by BMA in the Bowen Basin, which spans Central Queensland.
It is also one of the longest running, with operations starting more than 50 years ago in 1974.
BMA estimates it employs more than 9,500 employees and contractors across all of its operations.
In 2023, it sold its Daunia and Blackwater coal mines to Whitehaven for $2 billion citing a drop in profits and higher state royalties.
In 2024, it paid more than $4 billion dollars to the Queensland government and about $8.1 billion to suppliers.
BHP announced its lowest full-year earnings in five years last month, with its underlying profit sliding 26 per cent to $15.7 billion.
Its revenue was down eight per cent.Â
It reported a net operating cash flow of about $27 billion, adjusted after an effective tax rate including royalties of 44.6 per cent.
The mining giant said at the time that demand for its commodities remained resilient despite an uncertain global economic outlook.