Queensland Coal Royalties at Center of Job Cuts Dispute

Queensland's coal mining industry is facing job losses due to the government's refusal to change the royalties regime. Former Deputy Prime Minister Michael McCormack and mining industry figures have urged the government to reconsider the royalties. Treasurer David Janetzki blames the job losses on rising production costs and lower coal prices. Anglo American Australia has also cut nearly 300 jobs from its coal division.

BHP Group Limited has announced that it will suspend operations and cut 750 jobs at its Saraji South coking coal mine in Queensland, effective November 2025. The decision follows a combination of low coal prices and high state government royalties, which have significantly impacted the mine's profitability. The mine, part of the Saraji Mine Complex, is expected to be placed into care and maintenance mode.

The Saraji complex produced 8.2 million metric tons of coking coal in the year to June 2025. Despite strong medium-term demand for BHP's hard coking coal, the company cited unsustainable conditions at lower margin areas of the mine footprint as the reason for the suspension. The Queensland Government's increased royalties, which now range from 20% to 40% depending on the coal price, have been a significant factor in this decision. Previously, the top tier royalty was 15% for prices over A$150 a ton.

The decision comes amidst a broader industry trend of job losses. The Mining and Energy Union (MEU) has criticized the move, asserting that BHP should not use coal workers and communities as pawns in its fight with the Queensland Government over royalties. The union recently won a Federal court ruling rejecting BHP's application to delay pay rises for labor-hire workers, which will result in increased costs for the company.

BHP CEO Mike Henry has previously criticized the Queensland Government's royalty increases, which were implemented without industry consultation. The decision to raise royalties in July 2022 has been a contentious issue, with former Deputy Prime Minister Michael McCormack and mining industry figures urging the government to reconsider the policy. Treasurer David Janetzki has attributed the job losses to rising production costs and lower coal prices.

The current situation is not unique to BHP; Anglo American Australia has also announced job cuts in its coal division. The broader impact on the Queensland coal mining industry remains to be seen, as the industry faces ongoing pressure from both market conditions and government policy.