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 Liberal National Party State Government to back down on royalty rates that are often dubbed the world’s highest.

The miner said weak prices for metallurgical coal and the unsustainable impact of the Queensland Government’s coal royalties were responsible for its decision to slash jobs, as it complained of 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

Under the Queensland government’s 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 and 30 per cent for prices above $225 a tonne.

Mr Lancey told staff the high rates meant BHP paid the Queensland government eight times in coal royalties versus what it made in profit over an unspecified recent 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 the miner’s Saraji metallurgical coal mine in the Bowen Basin, as Mr Lancey also warned that BHP’s FutureFit training academy in Mackay, Queensland, faces a strategic review as part of the miner’s goal to cut labour costs.

Ben Cleary a Queensland-based portfolio manager for the Tribeca Global Natural Resources Fund said BHP should seek to negotiate a better deal with Queensland’s LNP government under Premier David Crisafulli.

“Yes, the royalties are ultimately incredibly damaging to the economics of Queensland coal projects,” Mr Cleary told The Nightly.

“But as we’ve seen with [ASX-listed coal miners] Stanmore and Whitehaven who’ve bought assets from BHP and run the assets more efficiently, they can generate much better returns.

“Perhaps a new owner of BHP’s assets that respects Queensland and its interests a little more might be able to negotiate a better deal with the Crisafulli government who are very pro business and pro mining.”

BHP in Queensland

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 to multi-year lows due to oversupply, although policy shifts in China are expected to support future demand.

In total BHP produced 18 million tonnes of steel-making coal in financial year 2025 at an average realised price of $US193.82 per tonne.

Brisbane-based Mr Cleary said BHP has not always played its cards right in Queensland even if the taxes are damaging to all Queensland coal miners’ economics.

“BHP is a Melbourne-based company that is really an iron company in Western Australia and treats Queensland like an after-thought despite owning world leading assets,” said Mr Cleary.

“It’s quite ironic in a post-woke world that BHP is bleating about the economics of a division they’ve been actively trying to run away from from for an ESG perspective in recent years.”

The sprawling iron ore, coal and copper miner’s 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.