BHP cuts 750 Queensland mining jobs at Saraji metallurgical coal mine

Mining giant BHP has blamed Queensland’s high taxes on coal sales for its decision to axe 750 jobs across the state as it pressures the Labor state government to back down on what’s often dubbed the world’s highest royalty rates.

The miner also flagged soft prices for metallurgical coal and the unsustainable impact of the Queensland Government’s coal royalties on business returns for its decision, as it flagged taxes as high as 67 cents in every dollar earned.

“No one wants to see jobs lost or operations paused,” the president of the BHP / Mitsubishi Alliance Adam Lancey told workers in a pre-recorded video.

“These are necessary decisions in the face of the Queensland Government’s unsustainable coal royalties and market conditions. The simple fact is, the Queensland coal industry is approaching a crisis point.”

Queensland coal under pressure

The Queensland government’s controversial coal royalty rates are threshold based on the average price per tonne of coal sold.

Under the royalty scheme, introduced during the last coal price boom in 2022, miners pay a royalty of 20 per cent for prices above $175 a tonne, 30 per cent for prices above $225 a tonne, and 40% for prices above $300 a tonne.

Mr Lancey claimed the high tax rates meant BHP paid the Queensland government eight times in coal royalties versus what it made in profit over a recent unspecified period. The coal boss added that BHP’s return on capital employed in its Queensland coal businesses fell as low as 1 per cent due to the high taxes.

The job cuts will affect its Saraji metallurgical coal mine, as Mr Lancey also warned that BHP’s Future Fit training academy in Mackay, Queensland, faces a strategic review as part of the company’s goal to sustainably reduce labour costs.

Opened in 1974, the Saraji mine is one of five metallurgical coal mines in Queensland’s Bowen Basin and one of Australia’s largest coal mines by recoverable reserves. BHP operates the mine in a 50:50 joint venture with Japanese conglomerate Mitsubishi Development.

In August BHP said prices for metallurgical coal mined in Queensland have fallen due to oversupply, although policy shifts in China are expected to support future demand. In total BHP produced 18 million tonnes of steel-making or metallurgical coal in financial year 2025 at an average realised price of $US193.82 per tonne.

BHP shares traded down 0.66 per cent to $40.50 at the market open and have added around 1 per cent over the year to date in 2025.

More to come...