BHP to suspend operations, cut jobs at Australian coking coal mine

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MELBOURNE (Reuters) – BHP will suspend operations and cut 750 jobs at a Queensland coking coal mine it shares with a unit of Mitsubishi, blaming low prices and high state government royalties that have dented its returns, it said on Wednesday.

BHP Mitsubishi Alliance’s (BMA) Saraji South, part of the Saraji Mine Complex, will be placed into care and maintenance from November 2025, it said in a statement.

The Saraji complex produced 8.2 million metric tons of coking coal in the year to June 2025.

BHP, one of the world’s top exporters of coking coal used in steelmaking, also owns four other mines under the BMA banner with Mitsubishi Development, a unit of Mitsubishi Corp, in Queensland.

“As joint owners of BMA, BHP and Mitsubishi Development do not want to see operations paused or 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 ,” BMA Asset President Adam Lancey said in a statement.

BHP said while medium-term demand for the company’s hard coking coal was strong, maintaining operations in lower margin areas of the mine footprint was not sustainable under current conditions.

In a move that BHP CEO Mike Henry criticised as taking place without industry consultation, Queensland raised royalties in July 2022 to 20% for coal priced above A$175 ($117) a ton, with a top tier of 40% for prices over A$300. Previously, the top tier was a 15% royalty on prices over A$150 a ton.

Prices of coking coal, which soared above $600 a ton following Russia’s invasion of Ukraine in 2022, have since normalised, last trading around $190.

The decision comes days after the Mining and Energy Union won a Federal court ruling rejecting BHP’s application to delay pay rises under Australia’s same-job same-pay regulations that came in under the Labor government.

That legislation means that labor-hire workers performing the same job as company staff are paid the same amount.

Last week, the union said as a result of the ruling, the pay of around 1,800 employees of mining services firms contracted to BMA would be lifted by around A$20,000 to A$30,000. That would be on top of an average coal salary of A$120,000 a year, according to salary comparison site Payscale.

“BHP should stop using coal workers and communities as pawns in its fight with the Queensland Government over royalties,” said MEU Queensland President Mitch Hughes.

($1 = 1.4959 Australian dollars)

(Reporting by Melanie Burton; Editing by Sonali Paul)