Queensland’s deputy premier has labelled BHP “unAustralian” and defended the state’s mining royalties scheme after the mining giant blamed it for its decision to mothball a coalmine and cut hundreds of jobs while also reviewing the future of its training academy.
On Wednesday, BHP Mitsubishi Alliance (BMA) announced a decision to suspend operations at its Saraji South coalmine and slash 750 roles across the state, blaming “unsustainable” royalties and market conditions.
The coal lobby describes Queensland’s progressive coal royalties scheme as the world’s highest levy on the industry and has run a years-long campaign against the scheme, since it was legislated under the former Labor government.
The deputy premier, Jarrod Bleijie, told media on Monday morning that the LNP would not abandon the royalties regime and said BMA had made “billions of dollars from the resources owned by Queensland taxpayers and Queenslanders”.
“We are doing everything we can as a government to make sure that Queensland is open for business, particularly in the mining sector. We are not at war with the mining sector. We are approving leases and mining approvals far more efficiently and quicker,” he said.
The Saraji South mine, an open-cut metallurgical coalmine about 300km north-west of Rockhampton, will be put into care and maintenance – effectively in mothballs – in November.
The BMA asset president, Adam Lancey, said the mothballing and job cuts were “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,” Lancey said.
“This is now having real impacts on regional jobs, communities and small businesses.”
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But Bleijie dismissed BHP’s argument that the state’s royalties regime was to blame, saying that “care and maintenance is the cyclical nature of mines in Queensland and the coal industry, it’s not new; it’s not a new phenomenon”.
“When the company want to invest, they re-establish the mine and they rebuild it with workers,” he said.
Bleijie also described BHP’s decision to conduct a strategic review of the BHP FutureFit Academy in Mackay, an educational facility that trains new miners, as “unAustralian”.
Guardian Australia understands that current students of the academy will be permitted to complete their training even if the review recommends its closure, but Bleijie slammed the decision.
“I think that is unAustralian. I think they should keep investing. 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 resource sector in Queensland,” he said.
The Mining and Energy Union (MEU) accused the company of “using coal workers and communities as pawns in its fight with the Queensland government over royalties”.
“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,” the MEU’s Queensland president, Mitch Hughes, said.
“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.”
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The mine has been mothballed before, in 2012, and reopened in 2020. Hughes said BMA has “form in turning this mine on and off to chase high coal prices, with no regard for the community or workforce impact”.
The union said the majority of the 750 jobs being cut at BMA – which claims to be the largest private sector employer in central Queensland – are in corporate and support roles across BHP’s whole Queensland business, including rail, ports and coal, with about 72 coal production jobs affected.
Other mines in the larger Saraji metallurgical coalmine complex will continue operating.
BMA is just the latest mining company to complain about royalties.
Under the scheme, miners pay a 20% royalty for prices above $175 a tonne, 30% for prices above $225 a tonne, and 40% for prices above $300 a tonne, well above comparable states. The scheme raised more than $10bn for the state budget in a single year at its peak. Revenue has since declined due to the falling price of coal.
Royalties were also cited by Bowen Coking Coal after it went into administration last month, while Coronado Coal blamed the levy for a reported $73m loss last week.
The Queensland treasury argues that royalties have little effect on profits.
The Labor leader, Steven Miles, said BMA made more than a billion dollars from the state and should continue to make a contribution to the state.
“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 progressive coal royalties would have kicked in more substantially,” he said.
“I think the government should send a clear signal by locking in the royalties for the next 10 years.”
